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Tue 21 Jul 2009 01:33 PM

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Avaya set to buy Nortel’s enterprise solutions arm

Avaya closes in on Nortel’s global enterprise solutions business

Avaya set to buy Nortel’s enterprise solutions arm
Avaya hopes to gain most of Nortel’s enterprise solutions assets for $475 million (Getty Images)

US network communications company Avaya has signed an agreement to acquire most of Nortel's enterprise solutions business for US$475 million.

The “stalking horse” agreement, which will allow other interested parties to make bigger bids for the business until the sale in finalised, includes Nortel’s enterprise solutions divisions in North America, Caribbean and Latin America and Asia.

The deal also includes the Europe, Middle East and Africa (EMEA) portion of Nortel’s enterprise solutions business, dependent on an asset sale agreement between the two companies.

The agreement follows Nokia Siemens Networks' proposed $650 million deal to take on the wireless assets of Nortel, the Canadian network and communications giant that filed for bankruptcy protection in January 2009.

Kevin Kennedy, president and CEO, Avaya, said the acquisition of the enterprise business would “increase Avaya’s global scale” and expand its channel partner network, as well as broadening its range of products and services.

"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."

In a recent interview with CommsMEA, Francois Lancon, president of Nortel’s enterprise business for EMEA and Asia, said the business was performing well in the region, despite the company being in bankruptcy protection.

“Despite that [bankruptcy protection], we have a set of sound businesses, and while we can’t predict the final outcome, business has been holding up well,” he said.

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