Tuesday, July 21, 2009

Nortel in sale agreements for enterprise solutions business with Avaya for $475 million

TORONTO, CANADA: Nortel Networks Corp. announced that it, its principal operating subsidiary Nortel Networks Ltd (NNL) and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Ltd have entered into a "stalking horse" asset and share sale agreement with Avaya Inc. (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 $475 million.

These 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, Ltd.

Commenting on the announcement, Nortel President and CEO, Mike Zafirovski said: "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 19, 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."

"The many customers I have spoken with have been highly supportive of our efforts and transparency throughout this process. They value our employees and technology platforms and are appreciative of our service levels which are at multi-year highs."

"Today's agreements underscore the value of Enterprise Solutions and the investments we have made in enterprise telephony, unified communications and data networking core competencies. If successfully completed, this transaction will provide clarity on the path forward for our Enterprise customers, partners and employees, and enable the industry to continue to benefit from Nortel-created technology, know-how and leading-edge innovation."

"We have some of the best talent in the industry and will explore all potential opportunities for them as we move through this process."

In EMEA, any impact on the Enterprise Solutions workforce in connection with this proposed transaction will be considered as part of any required information and consultation process with employee representatives or employees.

Joel Hackney, President, Enterprise Solutions added: "The successful buyer will gain access to an industry-leading portfolio that is optimized for real-time communications, bringing speed and simplicity to customers' network environments and allowing them to enhance collaboration, streamline business processes and improve productivity."

Hackney continued: "Enterprise Solutions has strong relationships with key customers and partners around the world, and we have helped them achieve industry-leading differentiation and competitive advantages. We remain committed to serving them without interruption through this process and, as we move forward, we pledge to communicate our progress to the greatest extent possible."

Chuck Saffell, CEOof Nortel Government Solutions, said: "Nortel Government Solutions has built a robust product and services business for US Federal government customers. If successfully concluded, this agreement will offer Avaya the opportunity to continue to grow this business and bring further value to customers."

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