Avaya wins bid for Nortel enterprise arm

Avaya has won a bid for Nortel's enterprise solutions business but is set to pay nearly double the amount it previously offered.

Avaya first offered $475 million back in July for the ailing firm's business arm, but following an auction will now pay $900 million in cash, with an additional $15 million to keep employees' jobs. Avaya beat Siemens Enterprise Communications to win the Nortel arm.

Kevin Kennedy, president and chief executive of Avaya, said in a statement: "We believe the acquisition brings inherent value to both organizations' customers, employees and partners, and we look forward to its successful conclusion."

Looking to soothe customer fears, Nortel Enterprise Solutions President Joel Hackney said that it would be business as usual for the firm as the deal is completed. "Through deal close and beyond, we will deliver on our stated customer commitments and maintain high levels of service and support," he said in a statement.

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"We will ensure our customers can fully leverage their existing Nortel investment as they benefit from the complementary capabilities of the Nortel and the Avaya portfolio of products and services," he added.

The firms will seek approval from US and Canadian courts tomorrow, and the deal is subject to approval from those countries as well as France and Israel. It is expected to close in the fourth quarter of the year.

Since Nortel filed for bankruptcy protection, the Canadian network firm has been selling off bits and pieces of itself, including its wireless assets. The firm's chief executive stepped down last month.