With an American economy in bad shape many companies are consolidating. Others are for sale, such as Skype. While the Skype deal allows eBay to retain part ownership, Nortel is a different story.

Avaya Inc. has won the auction to acquire Nortel Networks (NYSE: NT)’ Enterprise Solutions unit and some associated operations, but the firm had to boost its bid from $475 million to $900 to capture the Nortel assets.

Avaya staved off a last minute offer from Siemens Enterprise Communication and its private equity partner, Gores Group LLC. The enterprise unit provides landline phone systems to customers on a worldwide basis. In July, Avaya had submitted a $475 million stalking horse offer for the assets and last week that bid was challenged by an undisclosed suitor, which turned out to be the Siemens-Gores offer. The enterprise operation recorded revenues of $2.4 billion in 2008.