Chinese telecom equipment vendor Huawei Technologies Co Ltd and Franco-American Alcatel-Lucent are in preliminary talks on a possible tie-up, France-based business weekly Challenges reported on Wednesday.
The two companies may agree to produce a certain number of products together rather than merge, said the report on the magazine's website.
The tie-up is expected to help Huawei enter the U.S. market and to enhance Alcatel-Lucent's competitiveness, said the magazine.
A spokesman for Alcatel-Lucent declined to comment. Huawei could not be reached for comment.
In late August, Huawei said it had no plans to purchase a stake in Alcatel-Lucent. The statement was made in response to rumors about a tie-up between the two.
Alcatel-Lucent is the world's leading provider of telecom solutions and also one of China's top three 3G suppliers. Its Chinese flagship company is Alcatel-Lucent Shanghai Bell.
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