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.

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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