Avaya to acquire Nortel Enterprise group for US$900m

15 Sep 2009

Unified communications technology giant Avaya is to acquire Nortel’s Enterprise Solutions division for US$900m. Nortel is a significant employer in Ireland with more than 300 workers in Galway and close to 500 near Belfast.

Avaya said last night that it was selected to acquire Nortel Enterprise Solutions for US $900m in proceeds to Nortel and an additional pool of $15m reserved for an employee retention programme.

The news came on the heels of an auction for the ailing division. The final transaction is subject to regulatory approval in Canada and the US.

“Our successful bid brings us closer to adding Nortel and its complementary channel, portfolio, research and development, and global presence to Avaya,” said Kevin Kennedy, president and CEO, Avaya.

“We believe the acquisition brings inherent value to both organisations’ customers, employees and partners, and we look forward to its successful conclusion,” Kennedy added.

At its peak, the Northern Irish operation employed 2,000 people. Today, the operation employs 500 workers. The Galway operation has been in the city for more than 36 years.

In January, Nortel filed for bankruptcy, and earlier this month saw its Q4 revenues drop by 15pc to US$2.72bn, as market demand for its products fell in the face of the ongoing global recession.

Last month, the chief executive of Nortel Networks, Mike Zafirovski, stepped down from his position.

By John Kennedy