Avaya Buys Nortel

Tom Keating : VoIP & Gadgets Blog
Randy Savicky
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Avaya Buys Nortel

nortel-logo.gifAvaya has agreed to purchase Nortel's enterprise business for $900 million, which is much larger than the $475  million 'stalk horse' bid put out last month by Avaya. As part of the deal, Nortel will sell the assets of the Enterprise Solutions Business, and shares of Nortel Government Solutions and DiamondWare  to Avaya. Avaya will pay out US$900 Million in cash to Nortel, with an additional pool of US$15 Million Reserved for an Employee Retention Program.

But the bid is subject to approval. Both Canadian and U.S. Court Approvals of Sale will be sought at a joint hearing on September 15. Expect fireworks to fly in the Canadian government over this deal. Nortel is a huge source of national pride for Canadians, so to lose Nortel to an American company is something that the Canadian government may not be happy with. Though I just don't see the Canadian governement shelling out $900 million in a counter-bid offer to acquire and nationalize them.

Commenting on the announcement
, Nortel Enterprise Solutions President Joel Hackney said:

"This is fantastic news for our customers, as this will empower us to continue to deliver industry-leading solutions and services focused on unlocking the enterprise business potential enabled by unified communications. It provides the capability to chart our future with laser-focus, enabling customers to compete in new ways with greater scale and resources. We look forward to working closely with our customers, partners and stakeholders during this pre-close phase to ensure that we continue to innovate to meet customers' needs with high-performance, efficient and secure communications solutions.

"As we work through integration planning, it is business as usual, and we will continue to focus on supporting our installed base," Hackney said. "Through deal close and beyond, we will deliver on our stated customer commitments and maintain high levels of service and support. We will ensure our customers can fully leverage their existing Nortel investment as they benefit from the complementary capabilities of the Nortel and the Avaya portfolio of products and services."


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