Telephony heavyweights Nokia and Siemens on Monday confirmed reports they planned to merge their communications service provider businesses into a new 50:50 joint venture, Nokia Siemens Networks.
The companies said the venture would incorporate the Networks Business Group of Finnish mobile player Nokia and the carrier-related operations of German company Siemens.
The venture is expected to generate savings of 1.5bn euros (£1bn) annually by 2010, with the initial 60,000 member workforce globally reduced by 6,000 to 9,000 employees over the next four years.
The combined company generated 15.8bn euros in pro forma annual revenues based on the 2005 calendar year.
"Based on current market share data, it will be the second largest company in mobile infrastructure, second in services, third in fixed infrastructure and the third largest in the overall telecommunications infrastructure market," the two partners said.
The transaction is expected to close before 1 January 2007 subject to regulatory approvals and agreement on detailed implementation steps.
Simon Beresford-Wyllie, the present executive vice-president and general manager of networks at Nokia, is to take on the chief executive officer's position "immediately upon closing of the merger", the companies said.