Another week, another big M&A deal?
Finnish telecommunications firm Nokia is trying to buy French competitor Alcatel-Lucent.
The companies confirmed Tuesday that they are in “advanced discussions” about a takeover, but still warned any potential deal could fall through.
Both firms provide equipment, infrastructure and support to the telecommunications industry.
A marriage between Nokia and Alcatel-Lucent would give the combined company more clout when competing with bigger rivals like Sweden’s Ericsson and China’s Huawei Technologies.
Nokia, which sold its handset unit to Microsoft last year, has a market capitalization of about €26.7 billion ($28 billion). Alcatel-Lucent is less than half the size, with a market value around €12.2 billion ($13 billion).
Traders responded to the announcement by selling shares in Nokia and buying Alcatel-Lucent.
Nokia’s stock fell by 7% in Europe, while Alcatel-Lucent shares were surging by about 12%.
Nokia was once a giant in the mobile phone industry but was clobbered by Apple and Samsung. Nokia shares hit a peak in 2007 and then tanked.
Since selling its mobile phone business to Microsoft, the company has refocused on its telecommunications and broadband offerings.