Avaya and Siemens Enterprise Communications have both received approval to bid for the assets of Nortel’s enterprise networking division, which is estimated to fetch around $600 million.
Nortel’s enterprise arm has annual revenues of $2.4 billion, but has been significantly affected by the downturn with revenues dropping by 41% in the first quarter.
The auction is scheduled for 11 September at an undisclosed location in New York City.
Avaya had previously announced a $425 million '”stalking horse” bid for the unit.
However, the FT has reported that SEN, a joint venture between Siemens and US private equity form Gores Group, may have the upper hand in the sale as an Avaya purchase may result in anti-trust issues delaying the close of the deal by up to a year.
“Just as we saw with Nokia Siemens, while Avaya was the first it doesn’t mean that it is the locked-on winner of the bidding war,” said Bob Hafner, managing vice president of Gartner Research's enterprise communications application team.
Should Siemens win the auction it will become the leading global player in the enterprise market. It already holds the top spot in Western Europe but lacks US market share.