CIENA and ONI Systems agree to unite

February 18, 2002--CIENA Corp. and ONI Systems today announced a definitive agreement under which the companies will combine assets and intellectual property and consolidate their resources.

CIENA Corp. and ONI Systems today announced a definitive agreement under which the companies will combine assets and intellectual property and consolidate their resources.

Per the agreement, all outstanding shares of ONI common stock will be exchanged at the ratio of 0.7104 shares of CIENA common stock for each share of ONI common stock, which will represent approximately 24% ownership of the combined company. Based on the closing price of CIENA stock on Friday, February 15, 2002, the deal is valued at approximately $900 million.

"This is a different kind of combination for a different kind of market," explains Gary Smith, CIENA's president and chief operating officer. "Much of the rationale of this union comes from the synergies that can be gained by CIENA and ONI joining forces. Together, we can combine our efforts, consolidate our resources and target new market opportunities. As a result, we expect to accelerate CIENA's return to profitability."

CIENA expects the transaction will result in annualized operating expense synergies of $55 to $65 million for the combined company, as well as additional manufacturing efficiencies. It is estimated that the combined company would have approximately $1.3 billion of cash net of debt as of January 2002.

"Together, CIENA and ONI will be in a much better position to effectively execute a strategy of providing distributed intelligence all the way from the long-haul optical core of the network down to the optical edge," contends Mark Lutkowitz, vice president, optical networking research at CIR Inc. (Charlottesville, VA). "Service providers have increasingly been looking at the potential for enhancing metropolitan services as an extension of the intelligence now available at the network core. With ONI, CIENA now has significantly set itself apart from other major equipment vendors by having the widest portfolio of network-proven solutions currently available, offering faster provisioning of bandwidth and driving down operations costs over a much broader range of a carrier's network," he adds.

It is expected that this transaction will close during the second or third calendar quarter of 2002. Upon closing, the combined company will retain the CIENA name and will be headquartered in Linthicum, MD.

For more information about CIENA (Linthicum, MD), visit the company's Web site at www.CIENA.com. Additional information about ONI Systems (San Jose) and its products may be found at www.ONI.com.

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