HELSKINKI, Finland - Finland's Nokia announced on Tuesday that it was in advanced talks to purchase all of its Franco-American rival Alcatel-Lucent (IW 1000/240).
"Nokia and Alcatel-Lucent confirm that they are in advanced discussions with respect to a potential full merger, which would take the form of a public exchange offer by Nokia for Alcatel-Lucent," the company said in a statement.
"There can be no certainty at this stage that these discussions will result in any agreement or transaction," it added.
The announcement came a day after reports that Nokia was in talks to acquire Alcatel-Lucent's wireless infrastructure.
Rumors have swirled since December of a possible deal between the two firms, with France's Les Echos reporting on Monday that executives had been in negotiations since January.
The purchase would represent a significant boost in market share for Nokia. The Alcatel-Lucent wireless infrastructure unit alone accounted for 36% of total sales for the Paris-based company in 2014, according to Bloomberg, generating 4.7 billion euros ($5 billion) in revenue.
The deal would help Nokia bolster its mobile infrastructure business against Swedish arch-rival Ericsson, profiting from Alcatel's position as a leading supplier of 4G and LTE mobile networks and related services.
But the Finnish market did not welcome Tuesday's news. In Helsinki, the Nokia share was down by 6.32% an hour after the announcement.
On the Paris stock exchange however, the Alcatel-Lucent share shot up by 12.14%.
The Finnish company was the world's biggest mobile phone maker for more than a decade until it was overtaken by South Korea's Samsung (IW 1000/14) in 2012.
In 2014, Nokia sold its mobile phone and tablet division to U.S. software giant Microsoft (IW 500/16).
It has since then sat on most of the 5.4 billion euros made from that sale.
Nokia employs some 55,000 people worldwide, while Alcatel-Lucent employs almost 53,000.
Copyright Agence France-Presse, 2015
