Nortel Networks In Sale of Enterprise Solutions to Avaya

December 18, 2009

On December 18, 2009, Nortel completed its sale of substantially all of the assets of its global Enterprise Solutions business to Avaya, marking Nortel’s second, large-scale business divestiture and a significant step in Nortel’s bankruptcy process. The firm is counsel to Nortel and affiliates in their U.S. Chapter 11 proceedings, which are closely coordinated with proceedings in Canada, the United Kingdom and France. The firm is also counsel to Nortel in related transactions, including multiple distressed M&A sales.

Nortel’s Enterprise Solutions business includes units in North America, the Caribbean, Latin America, Asia, Europe, the Middle East and Africa. In September, Avaya emerged as the winning bidder for these assets following a bankruptcy auction that was held at the firm, agreeing to pay $900 million, with an additional $15 million for an employee retention program—nearly double Avaya’s original stalking horse bid. During 2009, the firm has been counsel to Nortel in seven separate asset sales relating to its bankruptcy that will generate over $3 billion in total proceeds and helping to further Nortel’s strategy of maximizing value through the sale of its businesses.

Nortel has been a client of Cleary Gottlieb for more than 20 years, during which time the firm has represented Nortel in numerous financing and M&A transactions, including the sale of assets related to Nortel’s UMTS access business to Alcatel-Lucent. The firm also advised Nortel on European aspects of its sale to Flextronics of manufacturing operations and related activities in Canada, Brazil, France and Northern Ireland.

A recognized leader in delivering communications capabilities across the world, Nortel does business in more than 150 countries.