Avaya to acquire NortelÔÇÖs enterprise unit

Avaya, the manufacturer of corporate phone systems and software, has paid $915 million to acquire Nortel Networks' enterprise business, its second-largest unit by revenue.  The deal, which is subject to Canadian and US court and regulatory approvals, includes $15 million for an employee retention program. Basking Ridge, New Jersey-based Avaya had previously made a $475m stalking horse offer for the enterprise unit, which makes phone equipment and networks for businesses and has annual revenues of around $2.4 billion.  Toronto-based Nortel is also selling shares of its government solutions and DiamondWare voice technology businesses as part of the deal. The transaction is expected to boost AvayaÔÇÖs position in the $20-billion corporate communication industry to number one, with a market share of about 25 percent and ahead of California-based Cisco Systems. "Our successful bid brings us closer to adding Nortel and its complementary channel, portfolio, research and development, and global presence to Avaya," said Kevin Kennedy, president and CEO, Avaya.  "We believe the acquisition brings inherent value to both organizations' customers, employees and partners, and we look forward to its successful conclusion."┬á┬á  Avaya has said it will hire 60 percent of the North American employees of the enterprise unit. It had a total 7,800 staff. Siemens Enterprise Communications, the other bidder for the unit, was expected to keep more Nortel employees in product development, management and sales in order to build a stronger presence in North America. The deal is expected to close in the fourth quarter of this year. Avaya was acquired in 2007 by two private equity firms, Silver Lake and TPG, and has around 18,000 employees. * ┬á┬á┬á┬á┬á┬á┬á*┬á┬á┬á┬á┬á┬á *