Canadian and US bankruptcy courts have approved the sale of Nortel Networks to Avaya for about $900m.

Nortel's UK business and it's European Enterprise Solutions division is being sold separately to the same firm.

Alongside the $900m price, Avaya is paying $15m to keep staff on. The deal covers Nortel's business division, government business and DiamondWare Ltd. But it still needs approval from French and Israeli courts and also needs the nod from some employee representative bodies in Europe.

The firms hope the deal will close by the end of 2009.

Joel Hackney, boss of Nortel's enterprise solutions, said he hoped the deal would be good for customers and that the complimentary products of the two firms would provide an especially good fit for government and military contracts.

The firms also hope the deal will be good news for the channel. Distributors will get a bigger portfolio of products and more potential customers as increase in unified communications increases.

What exactly will happen to distribution and reseller partners is likely to be one of the big issues to be sorted out as the two companies integrate their operations.

Nortel began life in 1895 supplying kit for Canada's telecoms infrastructure. Last year it turned over $10.8bn but made a loss of $3.4bn in the third quarter. In mid-January this year it was forced into bankruptcy protection.

A full statement can be read here. ®