Avaya’s «courtship» of Nortel’s corporate communications unit has been going on for months after the company went bankrupt. The company has now achieved an important step, winning the auction with a bid of 915 million dollars (about 617 million euros), almost double what it had initially proposed.
According to the terms defined in the deal, Avaya will pay $ 900 million in cash, in addition to about $ 15 million set aside for an employee retention program.
Yesterday’s announcement ends the auction process where Avaya faced an unknown competitor interested in Nortel Enterprise Solutions, but the purchase is still subject to regulatory approval by courts and customers in Canada and the United States.
The announcement of Nortel’s bankruptcy in January meant that the company was eventually dismantled and coveted by several companies. The mobile business was acquired by Ericsson for around 790 million euros, with Nokia Siemens Networks being the biggest loser in this acquisition.
Avaya appeared to be confident of its acquisition of the business communications area in July, with the signing of an acquisition agreement, but the entry of a competitor on the scene meant that the company had to pay almost twice the amount it had originally planned .
«Our winning proposal will enable Nortel to integrate with its complementary channel, portfolio, research and development and global presence with Avaya,» says Kevin Kennedy, Avaya president and CEO, in the statement announcing victory in the auction.
Editor’s Note: The news has been corrected to an accuracy in relation to Nortel’s origin.