Mobile phone makers 'to announce merger'

European mobile phone makers Nokia and Siemens AG are expected to announce today that they have agreed to combine their telephone equipment operations in a deal valued at €25bn.

Nokia would control a majority of seats on the board of the new company, which would be based in Finland and not traded separately on the stock exchange, The Wall Street Journal reported.

Ownership of the new company would be split evenly between Nokia and Siemens, and would be headed by Nokia executive, British-born Simon Beresford-Wylie, according to the report.

The merger would allow both companies to reduce research and development spending, with savings as high as €1.2bn 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.