Nortel, a maker of telecom equipment in bankruptcy, said Ciena prevailed in an auction and will pay $530 million in cash and $239 million in convertible notes due June 2017.

Ciena's purchase includes all products, contracts, patent and intellectual property, including the rights to technology that boosts the speed and capacity of fiber optic networks by as much as10-fold.

Nortel's optical networking business includes some of Nortel's most sought-after businesses units, intellectual properties and employees.

The deal is targeted to close in the first quarter, pending court approvals in the U.S., Canada, France and Israel. It has received regulatory approval in the U.S. and Canada.

Ciena is expected to hire at least 2,000 Nortel employees — or more than 85 percent of the workers in the businesses being sold. It would nearly double Ciena's workforce.