The deal would also see the transfer of around 1,000 of Nokia’s R&D employees — a majority of them located across Finland, India, UK and Denmark — to the Japanese entity, the two firms said.

Both firms entered into a strategic alliance to develop modem technologies for Evolved High-Speed Packet Access/Long-Term Evolution (HSPA+/LTE), widely used for wireless applications. Subject to regulatory approvals, the deal is expected to attain completion during the fourth quarter of 2010.

“The alliance enables us to continue to focus on our own core businesses, connecting people to what matters to them with our mobile products and solutions,” Nokia Executive Vice President Kai Oistamo said. Renesas would acquire Nokia’s wireless modem technologies for LTE, HSPA and GSM standards, which have been used in billions of handsets worldwide.

Nokia would also transfer certain patents to Renesas, a leading supplier of advanced semiconductor solutions.