Avaya wins Nortel enterprise unit for $915m

Dylan Bushell-Embling
15 Sep 2009

Avaya has won the bidding for Nortel's enterprise assets with a $915 million offer - nearly double its initial stalking horse bid.

Avaya will now gain control of the assets of the enterprise solutions business, as well as Nortel's stake DiamondWare and its government solutions unit, Nortel said.

Avaya beat Siemens Enterprise Communications, which submitted a last-minute bid, to acquire the unit. Avaya had set the floor price in July with a pre-auction bid of $475 million.

Avaya will pay Nortel $900 million in cash, with an additional $15 million reserved for employee retention.

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

But due to the multinational nature of the unit, the sale is subject to court approvals in the US, Canada, France and Israel as well as regulatory approvals. If granted, the sale is expected to close in Q4.

In an email to Nortel Enterprise employees posted on the All Things Nortel blog, division head Joe Hackney said Avaya is expected to retain at least three quarters of the unit's employees in countries with employee protection legislation, and 60% in other jurisdictions.

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