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Mitel CEO Expects No Channel Conflict From Aastra Merger

By Kelly Teal
November 12, 2013 - News

**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q3 2013.**

The CEO of Mitel Networks – the architect of his company's $374 million merger with Aastra Technologies – expects no channel conflict to arise from the combination of the two rivals.

That's because, Rich McBee pointed out to No Jitter, the top 20 Aastra and Mitel channel partners do not overlap. Aastra's market strength lies in Europe.

"The channel differences are pretty stark," McBee told No Jitter this week, adding that the Mitel and Aastra channels are "very compatible."

Tony Shen, co-CEO of Aastra, agreed.

“Our two organizations are tightly aligned culturally and financially with little product, geographic or channel overlap," he said in a press release.

Those expectations contrast markedly with the reality Mitel faced after the 2007, $723 million purchase of Inter-Tel. That acquisition, carried out by different Mitel executives, resulted in intense channel conflict, as Inter-Tel sold direct.

With little, if any, concern over channel conflict on its radar, Mitel is focused on growth. While both Mitel and Aastra are based in Canada, Aastra holds more market share in Europe, particularly the western portion. Both companies specialize in premises and cloud unified communications, and Aastra makes one of the three Microsoft Lync-certified phone sets. Observers say Mitel's challenge will be to increase revenue, and use the PrairieFrye and Aastra transactions to strengthen its Lync strategy.

Mitel is buying Aastra in a cash-and-stock deal. McBee will remain in charge of the combined company – which will keep its headquarters in Ottawa and operate under the Mitel name – while Aastra's co-CEO, Francis Shen, will become chief strategy officer and Tony Shen will serve as COO. Aastra shareholders will own about 43 percent of the merged entity.

Mitel said it's creating a billion-dollar company with No. 1 market share in Western Europe and a $100 million cloud business.

The deal should close in the first quarter of 2014.

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