Avaya To Acquire Nortel Unit For $475 Million

Nortel's Enterprise Solutions unit provides communications and telephone gear to businesses and carriers throughout the world.

W. David Gardner, Contributor

July 20, 2009

2 Min Read

Nortel Networks announced the sale of the majority of its Enterprise Solutions unit to Avaya Inc. for $475 million as the Canadian networking firm continued to sell off major pieces of its once-thriving company.

The agreement is a "stalking horse" deal, which leaves an opportunity for other firms to bid on the Nortel unit. Last month, Nortel agreed to sell its CDMA and LTE access unit to Nokia Siemens Networks for $650 million in another stalking horse agreement.

"Today's agreements underscore the value of Enterprise Solutions and the investments we have made in enterprise telephony, unified communications and data networking core competencies," said Nortel's Mike Zafirovski of the Avaya deal. "If successfully completed, this transaction will provide clarity on the path forward for our Enterprise customers, partners and employees, and enable the industry to continue to benefit from Nortel-created technology, know-how and leading-edge innovation." Zafirovski is Nortel's president and chief executive officer.

Nortel's Enterprise unit, which has long competed with Avaya, provides communications and telephone gear to businesses and carriers throughout the world. It was one of the largest pieces of a dismembered Nortel still available several months after Nortel filed for bankruptcy protection.

The International Nortel Networks Users Association said it supports the agreement. The user association represents more than 4,000 worldwide Nortel customers.

In a statement, Kevin Kennedy, president and CEO of Avaya, said: "The addition of Nortel Enterprise Solutions will increase Avaya's global scale, expand our channel partner network, and strengthen our (portfolio) of products and services. This is a strategic opportunity to acquire talent and complementary assets that position the combined company for growth and success."

The Nortel-Avaya deal requires the approval of the U.S. Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice.

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