Avaya-Nortel sale gets Industry Canada approval

Industry Canada has approved the takeover by Avaya Inc. of the enterprise assets of Nortel Networks Corp., which is operating under bankruptcy protection.

Basking Ridge, N.J.-based Avaya announced Friday the federal government completed a review required under the Investment Canada Act. Avaya won an auction in September when it agreed to pay US$915 million for the Nortel units that make switches, routers, firewalls, virtual private networking (VPNs), unified communications, private branch exchanges (PBXs), phones and key systems.

Nortel, which has lost money nearly every year except 1998, filed for protection from creditors last January. It has sold one wireless unit – which makes code division multiple access base stations for cellular carriers – to Telefonaktiebolaget LM Ericsson of Sweden for US$1.13 billion. That deal resulted in Ericsson hiring more than 900 former Nortel workers in Canada.

Earlier this month, Ciena Corp. won an auction to buy Nortel’s optical networking and carrier Ethernet units for US$769 million. That deal is still subject to regulatory approval.

On Friday, Avaya said it expects the deal to buy the enterprise assets will close within a month. The US$915 million Avaya is paying is comprised of US$900 million in cash to Avaya and US$15 million in “employee retention.”

Avaya, which is privately held by Silver Lake Partners, was born as a separate firm in 2000, when Lucent Technologies Inc. decided to spin off its enterprise unit. Lucent was formerly known at AT&T Bell Labs and merged with Alcatel SA of France in 2006.

Last year, Avaya hired Charlie Giancarlo, a former executive with Cisco Systems Inc., as its chief executive officer. He was replaced by Kevin Kennedy.

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Related Tech News

Featured Tech Jobs

 

CDN in your inbox

CDN delivers a critical analysis of the competitive landscape detailing both the challenges and opportunities facing solution providers. CDN's email newsletter details the most important news and commentary from the channel.