Court Approval Needed
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Avaya officials said the deal needs to go through a competitive
bidding process and needs approval from the U.S. Bankruptcy Court in
Delaware and the Ontario Superior Court of Justice. They expect the
process to take several weeks.
The Bankruptcy Court approved Nortel's deal with Nokia Siemens in early July.
However, challenges to Nortel's plans to sell off its businesses are
appearing. MatlinPatterson Global Advisors, a Nortel creditor,
reportedly has talked with Nortel officials about buying the entire
company, or at least developing a plan to restructure the company
rather than selling off its assets. MatlinPatterson reportedly has
until July 21 to submit a plan with the Bankruptcy Court.
Either way, though, Yankee Group's Kerravala said there needs to be
consolidation in the business communications space. Over the past 20
years, the voice industry has grown from a handful of companies, such
as Lucent, Nortel and Siemens, to including Cisco, 3Com, ShoreTel and
now-with the advent of voice software-Microsoft, IBM, Citrix and
possibly Google, Kerravala said in a July 20 blog post.
"Through these past few transitions we've doubled the number of
suppliers of voice services but there isn't double the number of
business end users," he wrote. "Couple this with wider adoption of
mobile phones and its clear the market needs to rationalize down."
Kerravala also noted that Avaya would have to play the part of diplomat should it acquire Nortel's enterprise business.
"From a product perspective, the combined organization is going to
have to go through some consolidation of products on the voice side and
decide what to do with data portfolio," he wrote in the blog. "Should
it choose to keep the data portfolio, Avaya would now have an
end-to-end voice and data solution-a systems approach, similar to what
the Avaya leadership had when they worked at Cisco. This will cause
some tension between Avaya and some of its alliance partners, such as
Brocade, Extreme and [Hewlett-Packard], so the company will need to
navigate that carefully."
