Avaya buys Nortel’s enterprise unit for US$475m

22 Jul 2009

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Communications equipment player Avaya has agreed to buy Nortel’s enterprise solutions business for US$475m in a move that will strengthen its position in this market.

“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.”

The proposed acquisition includes the Nortel Enterprise Solutions voice, data and government systems businesses.

“As the largest reseller of Avaya and Nortel equipment to Canadian business, Bell believes Avaya’s history of leadership in enterprise communications makes it an ideal candidate for this proposed transaction,” said Stéphane Boisvert, president of Bell Business Markets.

“Bell was the first major service provider to standardize on both Avaya and Nortel IP telephony solutions, and we are confident Avaya will continue to provide partners and customers with innovative business communications technologies and responsive customer support going forward.”

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.

“Avaya’s proposed acquisition of Nortel Enterprise Solutions is good news for our customers, who would benefit from the broadened range of compelling solutions,” said Hanif Lalani, CEO, BT Global Services.

“BT and Avaya have been working closely, and successfully, over the last couple of years. Building on our success, BT has plans to expand this engagement with Avaya over the next year to offer a full unified communications portfolio. Today’s news strengthens this expansion plan,” Lalani said.

By John Kennedy

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com