Sunday, July 19, 2009

Avaya to Acquire Nortel's Enterprise Business for $475 Million

Avaya agreed to acquire Nortel's enterprise solutions business for US$475 million. The deal includes substantially all of the assets of Nortel Enterprise Solutions business globally as well as the shares of Nortel Government Solutions Incorporated (NGS) and DiamondWare, Ltd.

Avaya described the acquisition as significant step in strengthening its leadership in business communications and positioning the company to effectively deliver industry leading enterprise communications solutions to customers around the globe.

"The addition of Nortel Enterprise Solutions will increase Avaya's global scale, expand our channel partner network, and strengthen our world-class portfolio of products and services," said Kevin Kennedy, president and CEO, Avaya. "This is a strategic opportunity to acquire talent and complementary assets that position the combined company for growth and success. We are committed to protecting the communications investments of the customers of Avaya and Nortel, and to effectively executing the integration of Nortel Enterprise Solutions and Avaya."

Nortel's CEO Mike Zafirovski described the deal is the best path forward to maximize the value in Nortel while preserving jobs.

Bell Canada, which is the largest reseller of Avaya and Nortel equipment to Canadian business, said it was pleased with the proposed transaction.

The transaction is subject to a competitive bidding process and requires the approval of the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice. Avaya expects that hearings before those courts to approve bidding procedures will be held within the next couple of weeks, followed by an auction, with hearings for approval of the ultimate sale to be held thereafter.

In EMEA, Avaya has entered into an agreement with the Joint Administrators, on behalf of the EMEA entities for which they have been appointed and the transaction is subject to information and consultation with employee representatives and approval of the courts in France and Israel. The transaction is also subject to customary closing conditions, including receipt of necessary regulatory approvals.

  • In June 2009, Nokia Siemens Networks agreed to acquire Nortel's key wireless assets for $650 million. The deal brings together the assets of the two companies in the field of mobile radio access, especially in CDMA, where Nortel is a leading supplier. The acquisition of Nortel's profitable CDMA business would significantly improve Nokia Siemens Networks' presence in North America and make it a leading supplier of wireless infrastructure products in the region.

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