Avaya reportedly offering US$500M for Nortel enterprise biz

If Avaya pulls out, Siemens Enterprise Communications could emerge as a buyer

Nortel is reportedly close to selling its enterprise division to Avaya for US$500 million.

According to an article in Canada's Globe and Mail this week, Avaya has emerged as the "favored bidder" for Nortel's Enterprise Solutions group, which develops and markets the company's switches, routers and telephony gear to businesses. Nortel is looking to sell off most or all of its assets, having apparently failed in a bid to emerge from bankruptcy as a viable competitor in data networking and telecom.

Nokia Siemens just acquired Nortel's CDMA and LTE wireless businesses for US$650 million. Nortel has said it is in advanced negotiations to sell other company assets.

Nortel's enterprise business has been declining rapidly. The unit generated about US$395 million in sales in the first quarter of 2009, down 41% from a year ago, 34% from Q4, 2008, and less than half of the US$806 million recorded for the fourth quarter of 2006.

"If executed, Avaya will become a larger player in the enterprise market - a top 4 player in Layer 2-3 Ethernet switching and the largest VoIP player with roughly 25% market share," states Oppenheimer & Co. analyst Ittai Kidron in a bulletin on the reported Avaya bid. "This could either push privately held Avaya to continue to acquire smaller players to round out its enterprise portfolio and further consolidate market share or position itself as a more attractive acquisition target."Cisco and Juniper are likely to aggressively poach Nortel's switching customers, Kidron states, and Avaya's partnerships with Juniper and Extreme Networks may be impacted as well.

If Avaya pulls out, Siemens Enterprise Communications could emerge as a buyer for Nortel's enterprise group, the Globe and Mail report states. Nortel has also drawn the interest of nine companies for its Metro Ethernet business, according to the report.

Nortel filed for bankruptcy early this year as its attempt to recover from a 2004 accounting scandal and a shortfall in demand took an enormous financial toll on the company. That, coupled with the overall global economic downturn, forced the company to ultimately break it self up, analysts say.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Avayanortelsiemens

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jim Duffy

Network World
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers


This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang


It really doesn’t get more “gaming laptop” than this.

Jack Jeffries


As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr


The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?