Nokia is in "advanced discussions" to merge with Alcatel-Lucent, a major rival in providing network equipment for mobile phones and other telecommunications gear, the companies said Tuesday.
The announcement confirmed months of market speculation that Finland-based Nokia would combine with all or part of Alcatel-Lucent, which is based in France.
The multibillion-dollar companies indicated that the deal would involve exchanging Nokia stock for shares of Alcatel-Lucent, but they cautioned "there can be no certainty" that their talks would result in a merger.
Still, their chief executives -- Rajeev Suri of Nokia and Michel Combes of Alcatel-Lucent -- met Tuesday with French President Francois Hollande at the Elysee Palace in Paris, an indication that a merger might be imminent.
Alcatel-Lucent's stock jumped in response to the announcement, gaining 33 cents, or 7.6%, to $4.68 a share. Nokia's stock fell 37 cents, or 4.4%, to $7.94.
Once known as a leading maker of cellphones, Nokia now focuses on telecom networking equipment and digital mapping services. Its revenue was $13.6 billion last year, based on current exchange rates.
Nokia sold its handset and related services business last year to Microsoft Corp. for about $6 billion.
Alcatel-Lucent likewise produces large-scale equipment for mobile networks and computing, and it posted 2014 revenue of about $14.1 billion.