Shares in Nokia opened lower on Monday after a report that its 50% owned Nokia Siemens
Networks is to offer $7 billion for smaller network equipment maker Tellabs.
Shares in Nokia opened 1% lower, compared with a flat DJ Stoxx European technology index.
Citing a source familiar with the deal, financial news Web site TheStreet.com said NSN -- a 50-50 joint venture between Nokia and Siemens -- is offering about $16 to $17 a share for Tellabs.
Shares in Tellabs closed at $11.85 on Friday.
"This is obviously a rumor and we do not comment on market rumours," said a Nokia Siemens spokesman.
Analysts in Helsinki saw the deal as unlikely, but noted the hefty premium would dent Nokia shares.
"With such a premium and as the timing is in the middle of Nokia Siemens Networks' own integration, the first impression of such a deal would be slightly negative," said Handelsbanken
analyst Karri Rinta. "I cannot think of any other reason for the share price decline."
EQ analyst Jari Honko said: "This is not impossible, but the price seems high."