Nokia (NOK) will acquire French networking equipment maker Alcatel-Lucent (ALU) for some $16.6 billion in an all share deal the Finnish manufacturer said positions the combined entity to capitalize on technological innovations such as the Internet of Things (IoT) and the transition to the cloud.

Under terms of the transaction, Alcatel-Lucent shareholders will gain 0.55 shares in the combined company for each of their existing shares, resulting in Nokia controlling 66.5 percent of the combined company and Alcatel-Lucent the remaining 33.5 percent.

The boards of both companies have approved the transaction, which is expected to close in the first six months of 2016, pending regulatory approval and sanction by Nokia’s shareholders. Shares of the new company will be traded on exchanges in the U.S. and France.

The combined company will be called Nokia and maintain headquarters in Finland. Risto Siilasmaa will serve as Nokia’s chairman and Rajeev Suri its chief executive officer. The new board will seat nine or 10 members, including three from Alcatel-Lucent, one of whom would serve as vice chairman.

Based on a 1H 2016 closing, the companies projected the deal will produce $25.9 billion in sales, operating profit of $320 million and, by 2019 about $950 million in cost savings annually.

Central to the deal were assurances by Nokia not to cut Alcatel-Lucent jobs and to keep France as a “vibrant center of the combined company.” The new company will have about 114,000 employees.

Officials said the combined company will accelerate development of future technologies such as 5G connectivity, IP and software-defined networking, the cloud, analytics and sensors and imaging, by leveraging Alcatel-Lucent’s Bell Labs and Nokia’s FutureWorks. Taken together, the companies’ R&D profiles in 2014 spanned $5 billion in spending and 40,000 employees.

Nokia said its Nokia Technologies will remain a separate entity focused on licensing and developing new technologies.

“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,” Suri said. “For all these reasons, I firmly believe that this is the right deal, with the right logic, at the right time.”

The companies said they expect to command a strong market position in the U.S., China, Europe and Asia-Pacific. 

For Alcatel-Lucent, the Nokia deal caps a remarkable turnaround. Two years ago, the company was on the verge of declaring bankruptcy but a corporate belt-tightening, targeting refinancing, refocusing and restructuring, righted the ship to profitability.

Separately, Nokia said it is considering selling its $7 billion HERE mapping business in what it called a “review of strategic options,” which may or may not result in a sale. The company provided no details on proposed suitors, price or timing on a potential sale of the HERE business.