Mitel and Polycom have announced a merger that will create a major player in the enterprise communications space.

Mitel is spending $1.96 billion in cash and stocks to acquire Polycom, which represents a 22 percent premium on the latter’s recent share price.

The deal, which is expected to close in the third quarter, sees Mitel add Polycom’s video conferencing services to its wide-ranging portfolio.

The new business will be the global market leader in business cloud communications and conference phones, and number two in video conferencing.

Both companies work and compete with a number of operators.

Polycom counts BT Global Services and Orange Business Services as partners, while Mitel works with O2 UK.

The combined company will be headquartered in Ottawa, Canada, and will operate under the Mitel name while maintaining the Polycom brand.

It would have had 2015 revenues totalling $2.5 billion.

Mitel CEO Richard McBee will lead the combined organisation with two Polycom directors expected to assume seats on the Mitel board.

McBee said: "Mitel has a simple vision - to provide seamless communications and collaboration to customers.

“To bring that vision to life we are methodically putting the puzzle pieces in place to provide a seamless customer experience across any device and any environment.

“Polycom is one of the most respected brands in the world and is synonymous with the high quality and innovative conference and video capabilities that are now the norm of everyday collaboration.

“Together with industry-leading voice communications from Mitel, the combined company will have the talent and technology needed to truly deliver integrated solutions to businesses and service providers across enterprise, mobile and cloud environments."

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