Industry Minister Tony Clement said Thursday he will review the Nortel-Avaya deal.

The insolvent Canadian telecom company announced last week it would sell its enterprise division to the U.S. telecom company Avaya for $900 million US.


Nortel announced last week it would sell the enterprise division to New Jersey-based Avaya Inc. for $900 million US. Industry Minister Tony Clement says Ottawa will review the deal. ((Fred Chartrand/Canadian Press))

The review will determine whether the transaction meets Ottawa's net-benefit-to-Canada test under the Investment Canada Act. The unit makes telecom equipment used by companies, governments and other big customers.

Despite calling Nortel a "thorny issue," Clement promised the review would be fair and follow standard procedures for proposed foreign investment. 

"My officials are already hard at work at amassing the information on the proposed deal, and we will commence a dialogue with that company to understand what their intentions are," he said. 

Vague on speed of review

Clement was vague about how fast the review would proceed but said he recognized Avaya will be eager to know whether the investment meets the government's approval or what changes would be required to push the deal through. 

"We are understanding of market forces but at the same time we have to do our due diligence," he said.

Earlier this week, Nortel announced plans to auction off its Carrier Networks business, its last major unit. On July 25, Nortel sold its wireless business to Sweden's LM Ericsson for $1.13 billion US.

With files from The Canadian Press