Nortel Picks Avaya In $900 Million Deal

NEW YORK (AP) -- Nortel Networks, which has been operating under bankruptcy protection since January, has selected Avaya as the successful bidder for its segment that makes communications systems for businesses.

Basking Ridge, N.J.-based Avaya Inc. will pay $900 million in cash for Nortel Enterprise Solutions and contribute $15 million to an employee retention program. Avaya had previously made a "stalking horse" bid of $475 million for the unit in a court-supervised bankruptcy auction.

Canada-based Nortel Networks Corp. expects the deal to close in the fourth quarter. Canadian and U.S. court approvals will be sought at a joint hearing on Tuesday.

The enterprise unit supplies landline phone systems and other communications equipment to businesses and large organizations around the world.

In a statement, Joel Hackney, president of enterprise solutions, said it will be "business as usual" at the unit while it is absorbed by Avaya.

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