Avaya Pressures Cisco With Nortel Deal
Verizon (VZ), one of Nortel's biggest customers, recently attempted to derail the Avaya acquisition in a court challenge, citing a potential risk to U.S. national security. The telecom giant uses Nortel gear to provide a number of U.S. government networks, although Avaya said last week that it is engaged in talks with Verizon to discuss its support concerns.
In addition to the $900 million price tag, Avaya has allocated $15 million for retaining Nortel employees. Nortel has also promised that customers will not be affected by the acquisition.
"As we work through integration planning, it is business as usual, and we will continue to focus on supporting our installed base," said Joel Hackney, Nortel's president of enterprise solutions, in a statement released Monday. "Through deal close and beyond, we will deliver on our stated customer commitments and maintain high levels of service and support."
Chuck Saffell, CEO of Nortel's government solutions, also sought to allay any federal support fears. "The companies' strengths in the information technologies sector of the U.S. Federal Government are remarkably complementary," he said. "Our combined product offerings, as well as our strong professional services business and solutions approach provide a win-win for both our government customers and our business."In its statement, Nortel also confirmed that Canadian and U.S. court approval for the sale will be sought at a joint hearing Tuesday. The transaction is expected to close in the fourth quarter of this year. Nokia Siemens Networks, a joint venture between Nokia (NOK) and Siemens (SI), recently agreed to buy part of Nortel's wireless business for $650 million, and Ericsson (ERIC) bought its main wireless networking division for $1.3 billion. Nortel's metro Ethernet business is now the next piece of the company on the block.
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