European telecom makers Nokia Corp. and Siemens AG have agreed to combine their telephone equipment units in a deal valued at roughly 25 billion euros ($31.6 billion), according to a newspaper report.
Nokia would control a majority of board seats of the new company, which would be based in Finland and not traded separately, The Wall Street Journal reported Sunday on its Web site, citing people familiar with the deal.
Ownership of the new company would be split evenly between Nokia and Siemens, and would be headed by a Nokia executive, Simon Beresford-Wylie, according to the report.
The deal was expected to be announced on Monday.
The combination would allow both companies to reduce redundant research and development spending, with savings as high as 1.25 billion euros ($1.58 billion) annually, according to the report.
Siemens, based in Munich, Germany, is not expected to leave the telecommunications business but will play a smaller role than Nokia in the new operation, the report said.
U.S.-based spokeswomen for Nokia and Siemens did not immediately return a call for comment Sunday evening.
Copyright 2006 The Associated Press.
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