After we reported yesterday that the two were in talks, Nokia has officially confirmed that it is acquiring telecoms equipment firm Alcatel-Lucent.

The deal values Alcatel-Lucent at €15.6bn (£11.2bn), with Nokia offering just over half of a share (0.55, equivalent to €4.28 based on Nokias April 13 stock price) for each share in Alcatel-Lucent. This means that Alcatel-Lucent shareholders will own 33.5 per cent of the combined company after the deal closes in early 2016.

Nokias mobile devices arm was acquired by Microsoft for €5.44bn back in September 2013, but the Finnish company still retains a hefty infrastructure business. This will continue to be the focus for the combined company, which will operate under the Nokia brand.

“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,” said Nokia president and CEO Rajeev Suri. “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 have hugely complementary technologies and the comprehensive portfolio necessary to enable the Internet of Things and transition to the cloud. 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.”