Unified communications vendor Avaya is reportedly considering a merger with rival Mitel to create a US$5 billion entity, according to a report from Bloomberg.
Citing “people with knowledge of the matter”, the report said both companies have had on-and-off discussions about a potential merger since April, but no final agreements have been made and Avaya is still reportedly considering rival offers.
The proposed merger’s terms reportedly specified that Mitel’s investors will own roughly one-third of the combined business. The company is owned by US private equity firm Searchlight Capital.
The report also said Mitel is also proposing to inject around $150 million into the combined entity, which will be used for share buybacks along with Avaya’s existing cash.
In Avaya's Q3 2019 earnings call last week, chief executive Jim Chirico said the company is in “advanced discussions with multiple parties on a range of strategic transactions to maximize shareholder value”. He said the process is expected to come to a close within 30 days.