US business communications specialist Avaya and Siemens Enterprise Communications (SEN) are going head-to-head in a race to acquire Nortel’s corporate networking business. According to a Financial Times report, the two companies have both placed bids for the business ahead of an auction scheduled for this Friday. Avaya had earlier made a US$475 million ‘stalking horse’ offer for the unit – Nortel’s second-largest by revenues – but reports suggest the business could go for more than US$600 million at auction. SEN is considered favourite to acquire the business as – unlike Avaya – it is a European-focused company that is unlikely to face antitrust issues if it ties up with Canada-based Nortel. If Avaya won the auction, an antitrust probe could delay a closing of the deal by up to one year, the FT says. In either eventuality, the acquisition is seen as a way to enable the winner to compete more effectively against Cisco, the market leader.

The latest auction follows on from Ericsson’s US$1.13 billion acquisition of Nortel’s CDMA and LTE access assets in late July, which were considered the firm’s most valuable assets. However, the deal proved controversial with many in Canada arguing that the business should have remained in the country. According to the FT, SEN has pledged to keep the headquarters of the corporate networking unit in Canada if it is successful at the auction in an attempt to soothe any political objections. Nortel – once Canada’s largest and best-known technology company – filed for Chapter 11 bankruptcy protection in January this year.