Avaya signed agreements to purchase Nortel’s enterprise solutions business for US$475 million.

Avaya believes the agreements are a significant step in strengthening its leadership in business communications and positioning the company to effectively deliver industry leading enterprise communications solutions to customers around the globe.

Nortel Networks Limited (NNL) and certain of other subsidiaries, including Nortel Networks and Nortel Networks UK, entered into a “stalking horse” asset and share sale agreement with Avaya for its North American, Caribbean and Latin America (CALA) and Asia Enterprise Solutions business; and an asset sale agreement with Avaya for the Europe, Middle East and Africa (EMEA) portion of its Enterprise Solutions business for a purchase price of US$475 million. The agreements include the planned sale of substantially all of the assets of the Enterprise Solutions business globally as well as the shares of Nortel Government Solutions Incorporated (NGS) and DiamondWare.

“The addition of Nortel Enterprise Solutions will increase Avaya’s global scale, expand our channel partner network, and strengthen our world-class portfolio of products and services,” said Kevin Kennedy, president and CEO, Avaya. “This is a strategic opportunity to acquire talent and complementary assets that position the combined company for growth and success. We are committed to protecting the communications investments of the customers of Avaya and Nortel, and to effectively executing the integration of Nortel Enterprise Solutions and Avaya.”

“We continue to be fully focused on running our operations and continuing to serve our customers while actively engaged in the sale of our businesses. We have determined that the sale of our businesses maximizes value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible. The CDMA and LTE Access stalking horse asset sale agreement announced on June 19th, and today’s agreements around our Enterprise business are solid proof of that value. This represents the best path forward, and we are advancing in our discussions with interested parties for our other businesses,” said Mike Zafirovski, Nortel President and Chief Executive Officer.

The proposed acquisition includes the Nortel Enterprise Solutions voice, data and government systems businesses.

The transaction is subject to a competitive bidding process and requires the approval of the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice. Avaya expects that hearings before those courts to approve bidding procedures will be held within the next couple of weeks, followed by an auction, with hearings for approval of the ultimate sale to be held thereafter.

In EMEA, Avaya has entered into an agreement with the Joint Administrators, on behalf of the EMEA entities for which they have been appointed and the transaction is subject to information and consultation with employee representatives and approval of the courts in France and Israel. The transaction is also subject to customary closing conditions, including receipt of necessary regulatory approvals.