Nokia, the Finnish-based telecoms equipment company has confirmed it has launched a €15.6bn all share bid for Alcatel-Lucent, the French provider of mobile, broadband and cloud-based services.

The deal which has been approved by both boards would see Nokia’s shareholders owning about two-thirds of the new entity, which would continue to be headquartered in Helsinki.

Nokia’s share price fell by close to 4 percent following the announcement as some shareholders and former executives expressed scepticism about both company’s ability to merge smoothly given difficult past experience and anticipated interference by the French government, which supports the deal.

Alcatel shares have surged by 11.6 percent.

Nokia's sold it's struggling phone division to Microsoft in 2013 - the US firm has since dropped the Nokia name from its devices. The company has indicated that it has no desire to get back into the increasingly competitive mobile market.

The new group will employ 40,000 research and development employees.