Nokia Oyj is in talks to buy Alcatel-Lucent, the companies said in a statement on Tuesday, a potential deal that could create a European telecoms equipment group worth over 40 billion euros ($42.16 billion) .

In a joint announcement, the pair said "there can be no certainty at this stage that these discussions will result in any agreement or transaction."

The statement came in reaction to reports that Nokia may buy France-based Alcatel's mobile networks arm.  -Reuters