French networking giant Alcatel-Lucent and Nokia Networks, the part of the Finnish company that wasn't sold to Microsoft earlier this year, are reportedly once again discussing a merger.

Company sources told German business publication Manager Magazin that the two could either unite their forces as one entity, or sign a close cooperation agreement.

Alcatel-Lucent is in the middle of a three-year "Shift Plan" - an effort to return to profitability after seven years of negative cash flow. This includes slashing 10,000 jobs, or 14 percent of its total workforce by 2015.

Shares in Alcatel, an often volatile stock, rose 8.7 percent following the report. However a source at the company later told Reuters he was not aware of any such discussion taking place.

Why can't we be friends?
According to Manager Magazin, the merger talks resumed in Autumn. Out of the two, Nokia is currently in a stronger position, following the sale of its handset business for US$7.2 billion. Now, the company is looking for ways to use that money to grow its market share, especially in the US.

If the merger is agreed, the resulting business would combine Nokia's strength in wireless networking and network function virtualization with Alcatel's extensive fixed-line networks, cloud expertise and the Bell Labs research division.

According to 2013 analyst estimates, a combination of Nokia Network Solutions and Alcatel-Lucent’s wireless business would control around a third of the global wireless infrastructure market.

The two have  discussed some form of cooperation repeatedly over the past five years, most recently in 2013.

In October 2014, Alcatel Lucent sold its Enterprise business to China Huaxin Post & Telecommunication Economy Development Center. As part of the Shift Plan, the company plans to sell a total of €1 billion worth of assets, and estimates that its current restructuring measures, including layoffs, will reduce costs by another billion.

The report also mentions that Nokia has been looking into the potential of the wearable technology market, where all of the devices feature some sort of wireless connectivity.

Inderes Equity Research analyst Mikael Rautanen told Reuters that with the cash from the Microsoft deal, Nokia could buy its struggling competitor outright.