The talks are at an advanced stage but a deal is not yet certain, they said.
"Nokia and Alcatel-Lucent confirm that they are in advanced discussions with respect to a potential full combination, which would take the form of a public exchange offer by Nokia for Alcatel-Lucent," a joint statement issued by the companies said. "There can be no certainty at this stage that these discussions will result in any agreement or transaction. A further announcement will be made when appropriate."
Last year Nokia sold off its mobile phone business to Microsoft in a €5.44 billion deal. The move signalled Nokia's intention to focus on its other businesses, which include network infrastructure software, hardware and services, location intelligence, and advanced technology development and licensing.
In recent years Alcatel-Lucent has been implementing a 'shift plan' aimed at refocusing the company "as an IP networking and ultra-broadband specialist". The strategy has involved selling off some parts of its company, including its enterprise business to China Huaxin in a €202 million deal. It previously outlined its aim to raise at least €1 billion from "selective asset sales" by the end of 2015.
