Nokia Corp. and Siemens AG are expected to announce Monday that they are combining their phone equipment units in a deal valued at $31.5 billion, according to a media report Sunday.

The combined entity, which would not be traded publicly, would be based in Nokia’s home country of Finland, The Wall Street Journal reported in its online edition, citing unnamed people familiar with the matter.

Siemens would hold a minority of board seats, although the company, yet to be named, would be owned on a 50-50 basis, The Journal said.

Both companies would contribute their network equipment operations to the new entity, The Journal said. The companies expect savings from reducing duplicated research and development could reach $1.58 billion annually…

The new company will be run by Nokia executive Simon Beresford-Wylie in the role of chief executive…

While the move does not mark an official exit from the telecom business by Siemens, the company is expected to play a smaller role than Nokia in the new company, The Journal said.

Nokia wins.