Avaya acquires Nortel rumors

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Avaya acquires Nortel rumors

Thumbnail image for nortel-logo.gif With today's news of Nortel's potential bankruptcy flying, my fellow TMC team members have been trading emails back-and-forth about Nortel's future. (See also Rich's overview).

Brendan Read had an interesting take that I thought I'd share:
This could cause a political firestorm in Canada: Nortel being a Canadian company, Avaya being American, expected more job losses from consolidation, Stephen Harper's Conservative minority government being propped up by the center-left parties including a resurgent Liberal party under its US-educated new leader Michael Ignatieff, and the bulk of Nortel's jobs being in the battleground province of Ontario.

Parliament resumes later this month with a new budget--and his deal could add enough explosives to the mix to ignite another election. Harper is a superb political gameplayer which is why he stopped the sale of the firm that made the Canadarm to an American outfit.

He then pointed to an Industry Week article where the sale was blocked by the Canadian government.

So is an Avaya acquisition of Nortel in the works? And if so, will the Canadian government block it? Nortel is one of Canada's most prestigious companies. It would almost be equivalent to the U.S. losing Coca-Cola. Ok, maybe not. AT&T then? Interesting times ahead for Nortel, which has very good technology. Someone is going to pick up Nortel, whether it's an American company or someone else remains to be seen. Maybe the Canadian government will join the U.S. "bailout" fracas and acquire Nortel themselves?

Nortel throws a Hail Mary - "Nortel will now seek creditor protection under the Companies' Creditors Arrangement Act (CCAA) in Canada, and its American subsidiaries have filed for Chapter 11 with the U.S. Bankruptcy Court for the District of Delaware"

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