A memorandum of agreement between Nokia and Alcatel-Lucent has been created. Witnesses of the merger said that the transaction mentioned that Nokia will make an offer for all of the equity securities of Alcatel-Lucent. This is through a public exchange offer to be made in France and in the United States. This is on the basis of 0.55 of a new Nokia share for every Alcatel-Lucent share.

The transaction further states that: all-share transaction values Alcatel-Lucent at EUR 15.6 billion on a fully diluted basis, corresponding to a fully diluted premium of 34% (equivalent to EUR 4.48 per share), and a premium to shareholders of 28% (equivalent to EUR 4.27 per share), on the unaffected weighted average share price of Alcatel-Lucent from the past three months. This transaction is from Nokia closing share price of EUR 7.77 on April 13, 2015.

Nokia and Alcatel-Lucent Board of Directors have approved the terms of the proposed transaction. This transaction is expected to close in the first half of 2016. This transaction is for approval by Nokia’s shareholders, completion of relevant works council consultations, receipt of regulatory approvals and other customary conditions.

According to the merger, the combined company aims to create a foundation of seamless connectivity no matter where the user is located. This is important for changes that will happen in the future as well as the “Internet of Things” and the potential transition of data to cloud storage. Because of Alcatel – Lucent’s Bell Labs and Nokia’s FutureWorks and Nokia Technologies, will stay as separate entities which are known to foster changes in the future.

The two companies have decided that the combined company will be called Nokia Corporation, and will be headquartered in Finland and a strong presence in France. Risto Siilasmaa is planned to serve as Chairman, and Rajeev Suri as Chief Executive Officer. The combined company’s Board of Directors is planned to have nine or ten members, including three members from Alcatel-Lucent, one of whom would serve as Vice Chairman

Rajeev Suri, President and Chief Executive Officer of Nokia, said “Together, Alcatel-Lucent and Nokia intend to lead in next-generation network technology and services, with the scope to create seamless connectivity for people and things wherever they are. Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs. We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale. We have hugely complementary technologies and the comprehensive portfolio necessary to enable the internet of things and transition to the cloud. We will have a strong presence in every part of the world, including leading positions in the United States and China. Together, we expect to have the scale to lead in every area in which we choose to compete, drive profitable growth, meet the needs of global customers, develop new technologies, build on our successful intellectual property licensing, and create value for our shareholders. For all these reasons, I firmly believe that this is the right deal, with the right logic, at the right time.”

Michel Combes, Chief Executive Officer of Alcatel-Lucent, added: “A combination of Nokia and Alcatel-Lucent will offer a unique opportunity to create a European champion and global leader in ultra-broadband, IP networking and cloud applications. I am proud that the joined forces of Nokia and Alcatel-Lucent are ready to accelerate our strategic vision, giving us the financial strength and critical scale needed to achieve our transformation and invest in and develop the next generation of network technology. This transaction comes at the right time to strengthen the European technology industry. We believe our customers will benefit from our improved innovation capability and incomparable R&D engine under the Bell Labs brand. The global scale and footprint of the new company will reinforce its presence in the United States and China. The proposed transaction represents a compelling offer for our shareholders both in terms of upfront premium and long term value creation potential. Shareholders of Alcatel-Lucent now have the opportunity to participate in the future upside of the industrial project that they have supported during the last two years, through a stronger combined business with greater global scale and a better position for the longer term. The new company will also provide our employees exciting opportunities to be part of a global leader.”

About Nokia

Nokia Oyj is a Finnish multinational communications and information technology company. Nokia has headquarters in Espoo, Helsinki metropolitan area. In 2014, Nokia employed 61,656 people across 120 countries, conducts sales in more than 150 countries and reported annual revenues of around €12.73 billion. Nokia is a public limited-liability company listed on the Helsinki Stock Exchange and New York Stock Exchange It is the world’s 274th-largest company measured by 2013 revenues according to the Fortune Global 500. Nokia stock market evolution: http://www.marketwatch.com/investing/stock/nok

About Alcatel – Lucent

Alcatel-Lucent is a French global telecommunications equipment company, with headquarters in Boulogne-Billancourt, France. It major lie up  focuses on fixed, mobile, and converged networking hardware, IP technologies, software, and services. Alcatel-Lucent has operations in more than 130 countries. Alcatel – Lucent stock market evolution: http://www.marketwatch.com/investing/stock/alu

Finland’s Nokia revealed that it is in “advanced” merger discussions with Alcatel-Lucent, after the two companies have been rumored to be discussing a potential partnership. Nokia’s shares have fallen up to 6 percent after the news of the potential merger and on the other hand, Alcatel-Lucent stocks were up to 15 percent higher.

According to a reliable source, the potential merger would be in the form of a public exchange offer by Nokia for Alcatel – Lucent. The statement also included some words of caution: “There could be no certainty at this point that these discussions will result in any agreement or transaction.”

It is unclear at this point if Nokia would acquire all of Alcatel-Lucent’s assets, or it is only eyeing its wireless arm. Credit Suisse rated stock of both Nokia and Alcatel-Lucent on Monday, and mentioned that a fair value for the Alcatel – Lucent company’s wireless business would be 2-2.5 billion euros ($2.1-2.7 billion). Credit Suisse representative mentioned: “We believe that such a potential deal would allow Nokia to significantly improve its presence in the U.S. with AT&T and Verizon (where Ericsson and Alcatel-Lucent are key suppliers).”

Indeed, combining Nokia and Alcatel – Lucent would result in a major powerhouse in Europe and potentially a potential entry to US markets but could affect jobs. In response to this uncertainty, French Economy Minister Emmanuel Macron announced on Tuesday that if ever a deal with transpire between the two companies, there will be no job cuts in France. This announcement followed a meeting at the French Elysee between the chief executives of Nokia and Alcatel-Lucent and French President Francois Hollande.

“It’s a good move for Alcatel-Lucent because it is a move for the future, because we are building, with this tie-up, a new conquest for Alcatel-Lucent, which was a company in great difficulty two years ago,” Macron also commented.

About Nokia

Nokia Oyj is a Finnish multinational communications and information technology company. Nokia has headquarters in Espoo, Helsinki metropolitan area. In 2014, Nokia employed 61,656 people across 120 countries, conducts sales in more than 150 countries and reported annual revenues of around €12.73 billion. Nokia is a public limited-liability company listed on the Helsinki Stock Exchange and New York Stock Exchange It is the world’s 274th-largest company measured by 2013 revenues according to the Fortune Global 500.

Nokia is also a significant contributor to the mobile telephony industry, having assisted in development of the GSM and LTE standards, and was, for a period, the largest vendor of mobile phones in the world. It is the biggest supplier of the smartphone industry through its Symbian platform, but it was soon overshadowed by the growing dominance of Apple’s iPhone line and Android devices. Nokia eventually entered into a pact with Microsoft in 2011 to exclusively use its Windows Phone platform on future smartphones. Nokia stock market evolution: http://www.marketwatch.com/investing/stock/nok

About Alcatel – Lucent

Alcatel-Lucent is a French global telecommunications equipment company, with headquarters in Boulogne-Billancourt, France. It major lie up  focuses on fixed, mobile, and converged networking hardware, IP technologies, software, and services. Alcatel-Lucent has operations in more than 130 countries. Alcatel-Lucent has been named Industry Group Leader for Technology Hardware & Equipment sector in the 2014 Dow Jones Sustainability Indices review ^]and listed in the 2014 Thomson Reuters Top 100 Global Innovators for the 4th year in a row.

Alcatel-Lucent’s chief executive officer is Michel Combes and the non-executive chairman of the board is Philippe Camus. After seven consecutive years of negative cash flows, in October 2013 the company announced plans to slash 10,000 employees, or 14% of the total current 72,000 workforce, as a part of a €1 billion cost reduction effort.

In June 2013, Michel Combes has announced a new strategy calling it “The Shift Plan is a three-year plan including portfolio refocusing on IP networking, ultra-broadband access and cloud; 1 billion Euro in cost savings; selective asset sales intended to generate at least 1 billion Euro over the period of the plan and the restructuring of the Group’s debt. On October 1, 2014, Alcatel-Lucent has announced its take to improving employee training and this is through the Post & Telecommunication Economy Development Center.

Alcatel-Lucent is the o Bell Laboratories. Belli has the largest research and development facilities in the industry. Bell Labs has more than thousands of employees and has been awarded eight Nobel Prizes and the company holds over 29,000 patents. Alcatel – Lucent stock market evolution: http://www.marketwatch.com/investing/stock/alu