Law360, New York (November 11, 2009) -- Telecommunications company Avaya Inc. said Wednesday that it had received antitrust approval from the Federal Trade Commission and the Canadian Competition Bureau for its proposed $915 million purchase of bankrupt Nortel Networks Corp.'s enterprise solutions business.
Avaya said the FTC granted it early termination of the antitrust waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The company also said it received a no-action letter from the Canadian Competition Bureau indicating that there were no grounds to challenge the transaction.
The deal previously was approved by bankruptcy courts in both the United States and Canada.
But before the deal becomes final, Avaya still needs antitrust approval from the European Union, as well as some other, smaller jurisdictions around the world.
A review also is taking place under the Investment Canada Act, which provides for the review of investments in Canada by non-Canadians to ensure benefit to Canadians.
Basking Ridge, N.J.-based Avaya said it expects to close the transaction sometime next month.
Avaya won its bid to acquire Nortel's enterprise solutions business this September in exchange for $900 million in cash and an additional $15 million for a staff retention program.
Verizon Communications Inc. had objected to the deal, claiming that unless the repairs and services contracts it held with Nortel were taken up by Avaya, the communications systems of thousands of its customers, which include government agencies and courts, might be disrupted.
But the bankruptcy court shot down that objection during a hearing.
For its part, Nortel — a Canadian company that manufactures equipment and systems in optical, wireless and voice technologies — has been shedding assets since it filed for Chapter 11 bankruptcy in January.
Last month, for example, communications equipment supplier Ciena Corp. said it would pay $390 million in cash and about $131 million in stock to acquire Nortel's optical networking and carrier Ethernet assets.
Ciena is expected to make employment offers to at least 2,000 Nortel employees in connection with the acquisition, according to a filing with the U.S. Securities and Exchange Commission.
Prior to that, Nortel sold its business segment to Radware Ltd. for about $14 million, along with a breakup fee of $650,000 and as much as $400,000 in out-of-pocket fees and expenses.
It also reached a $1.13 billion deal with Telefonaktiebolaget LM Ericsson for its wireless infrastructure business.
Nortel is represented in its bankruptcy by Cleary Gottlieb Steen & Hamilton LLP and Morris Nichols Arsht & Tunnell LLP.
The case is In re: Nortel Networks International Inc., case number 09-10138, in the U.S. Bankruptcy Court for the District of Delaware.
--Additional reporting by Megan Stride, Christopher Norton and Nick Brown

