Avaya wins Nortel enterprise business for $900 million

Avaya has emerged because the winning bidder for Nortel’s enterprise business, beating out Siemens Enterprise Communications over the weekend.

The firm can pay $900 million for the unit, Nortel’s Government Solutions cluster and DiamondWare Ltd., a Nortel-owned maker of softphones. Avaya also will contribute a further pool of $15 million for an employee retention program. That value is almost twice what Avaya was initially said to be shopping for the enterprise business for back in July before auction bidding kicked in.

Slideshow: the increase and fall of Nortel

Avaya has sought Nortel’s enterprise business in hopes of boosting its share of the enterprise telephony and unified communications markets, and obtaining a lot of customers to migrate to its IP line of communications merchandise.

The sale, expected to shut later this year, is subject to court approvals within the U.S., Canada, France and Israel further as regulatory approvals, alternative customary closing conditions and bound post-closing purchase value changes. Telecom carrier Verizon, however, is anticipated to contest the sale on the grounds that Avaya doesn’t commit to retain client support contracts between Nortel and Verizon.

Nortel customers hope the deal works out in their interest.

“Nortel earned the trust of our user cluster members by delivering innovative, reliable communications solutions and guaranteeing high-levels of service and support, ” said Victor Bohnert, government Director of the International Nortel Networks Users Association, during a ready statement. “With the announcement of today’s purchase by Avaya, we glance forward to extending that relationship forward to serve the business communications desires of our constituency base across the world.”

Nortel can obtain Canadian and U.S. court approvals of the proposed sale agreement at a joint hearing on September fifteen, 2009. The sale shut is anticipated late within the fourth quarter. In some EMEA jurisdictions this transaction is subject to info and consultation with employee representatives.

As previously announced, Nortel doesn’t expect that its common shareholders or the well-liked shareholders of Nortel Networks restricted can receive any price from the creditor protection proceedings and expects that the proceedings can lead to the cancellation of those equity interests.