Avaya could consider merging with Nortel Networks Corp.

Avaya could consider merging with Nortel Networks Corp.

Market sources suggest that Avaya Inc. in talks with Nortel Networks for a potential deal that could possible result in a merger.

Market analysts believe that such a merger could create the world’s largest vendor of Web-based phone systems.

Avaya just recently postponed an investor conference and this led to rumors that the company could be in talks for a possible sale.

Prudential analyst Inder Singh spoke about a possible deal between the two companies: “A combination with Nortel would create a dominant vendor. A private-equity-led buyout is possible, but it wouldn’t solve the issue of consolidation.”

The Wall Street Journal separately reported in a news item that Avaya was in talks with private equity firm Silver Lake about a leveraged buyout.