Industry Canada has approved the takeover by Avaya Inc. of the enterprise assets of Nortel Networks Corp., which is operating under bankruptcy protection.
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.
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.
Earlier this year Avaya launched Aura, a Linux server designed to function as a communications server in a multi-vendor environment, using session initiation protocol (SIP).
Last month, Nortel agreed to sell its Global System for Mobile Communications (GSM) products to Ericsson and Kapsch AG. That deal, valued at US$103 million, is not expected to affect more than 10 Canadian Nortel workers.
Nortel was started in 1895 as the manufacturing unit of Bell Canada Enterprises (BCE) Inc. It was spun off as a separate company, known as Northern Electric and then Northern Telecom.
