Nokia has agreed to buy the French telecom company Alcatel-Lucent in an all-stock deal valued at 15.6 billion euros ($16.6 billion). The deal, which is the biggest-ever acquisition by the Finnish telecom giant, would help its ambition to become a major provider of telecom and networking equipment.

Under the terms of the deal, announced Wednesday, investors will receive 0.55 Nokia shares for every Alcatel share they own. As a result, Alcatel shareholders would own 33.5 percent of the new entity and Nokia would control 66.5 percent. “Each company's Board of Directors has approved the terms of the proposed transaction, which is expected to close in the first half of 2016,” Nokia said, in a statement released Wednesday.

The new company will use the Nokia brand, but will retain the name of Alcatel-Lucent's Bell Labs for its R&D activities.

The combined company would have about 114,000 employees and combined sales of about 26 billion euros. The deal also places Nokia in a position to compete with Sweden’s Ericsson.

In 2014, Nokia had a roughly 17 percent market share in wireless networks globally -- behind 30 percent for Ericsson and 20 percent for Huawei -- the Wall Street Journal reported. Alcatel had a 10 percent share.

“With more than 40,000 R&D employees and spend of 4.7 billion euros in R&D in 2014, the combined company will be in a position to accelerate development of future technologies including 5G, IP and software-defined networking, cloud, analytics as well as sensors and imaging,” Nokia said, in the statement.