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Microsoft Corp.and Nokia Corp. have announced that the boards of directors for both companies have decided to enter into a transaction whereby Microsoft will purchase substantially all of Nokia’s devices & services business, license Nokia’s patents, and license and use Nokia’s mapping services.

Under the terms of the agreement, Microsoft will pay €3.79 billion ($4.996 billion) to purchase substantially all of Nokia’s devices & Services business, and €1.65 billion ($2.1745 billion) to license Nokia’s patents, for a total transaction price of €5.44 billion ($7.1691 billion) in cash. Microsoft will draw upon its overseas cash resources to fund the transaction. The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia’s shareholders, regulatory approvals and other closing conditions.

“It is a bold step into the future – a win-win for employees, shareholders and consumers of both companies. Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services. In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution,” said Steve Ballmer, chief executive officer of Microsoft.

Building on the partnership with Nokia announced in February 2011 and the increasing success of Nokia’s Lumia smartphones, Microsoft aims to accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing. For Nokia, this transaction is expected to be significantly accretive to earnings, strengthen its financial position, and provide a solid basis for future investment in its continuing businesses.


Nokia headquarters

“For Nokia, this is an important moment of reinvention and from a position of financial strength, we can build our next chapter. After a thorough assessment of how to maximize shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders. Additionally, the deal offers future opportunities for many Nokia employees as part of a company with the strategy, financial resources and determination to succeed in the mobile space,” said Risto Siilasmaa, chairman of the Nokia board of directors and, following today’s announcement, Nokia interim CEO.

Following the transaction, Nokia plans to focus on its three established businesses, each of which is a leader in enabling mobility in its respective market segment: NSN, a leader in network infrastructure and services; HERE, a leader in mapping and location services; and Advanced Technologies, a leader in technology development and licensing.

“We are excited and honored to be bringing Nokia’s incredible people, technologies and assets into our Microsoft family. Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we anticipate a smooth transition and great execution,” Ballmer said. “With ongoing share growth and the synergies across marketing, branding and advertising, we expect this acquisition to be accretive to our adjusted earnings per share starting in FY15, and we see significant long-term revenue and profit opportunities for our shareholders,” added Mr. Ballmer.

Tags: Microsoft, Nokia, Business

Discussion

Comments currently: 7
Discussion started: 09/03/13 10:53:24 AM
Latest comment: 09/04/13 10:04:19 PM
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[1-5]

1. 
whole nokia for just 7.2billion$.....
there is only person responsible to screw such a good company-Stephen Elop
and nokia shareholders are just bunch of idiots for not throwing Elop outside.

elop said nokia not used android coz of samsung,, just give me ans a simple question-if lumia 520 runs on android then who will buy similarly priced samsung one???????????????
nokia shareholders are ********
5 4 [Posted by: mudi1  | Date: 09/03/13 10:53:24 AM]
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2. 
Microsoft's biggest mitake-
frnds u know why all oem's throwing off winRT out of their portfolio,,one of the major reason is microsoft is making hardware for their OS and competing against their partners. now their partners are their rivals.
on other side evry partner has a market like lenovo and huawei has china,asus and htc has taiwan etc. coz they know their country best .

now after nokia acquisition i am damn sure same story will be reepeated- all oem's like samsung,huawei,htc will flush windows phone from their portfolio....so MS will loose market penetration means lesser wp8 devices means less developer support means less regional apps(really matters) means less sell figures.. on other side their partners will become enemies and they will not allow to steal their market.

google nexus uses completely deferent approach which motivates their partners to push their limits while MS tries to steal partners profit.

so result is MICROSOFT WILL BECOME MICROSPOT.
3 4 [Posted by: mudi1  | Date: 09/03/13 11:04:33 AM]
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- collapse thread

 
Windows phone market is substantially a Nokia one. The other players are insignificant.
1 0 [Posted by: eleman  | Date: 09/03/13 11:59:18 AM]
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agreed buddy, but today they are wp8 partners. in future they will completely ditch windows phone os and will be android exclusive means rivals to MS.
do u know in china lenovo and huawei are the king and now they will do their best to throw MS out of china.
2 2 [Posted by: mudi1  | Date: 09/03/13 01:21:14 PM]
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3. 
Partners dumped RT, because nobody wanted to buy it.
Partners may by angry for M$+Nokia, but will not go under only Google feets.
1 0 [Posted by: Tristan  | Date: 09/03/13 02:08:47 PM]
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4. 
This is predictable after Ballmer started talking about needing to restructure the company to become a gadget maker to compete with Apple and Samsung. Microsoft would never adopt Google's approach of Open Sourcing its Windows 8 OS - it was always going to go the Apple route and do things in-house. MS doesn't have the expertise to make phones themselves, so a purchase of failing Nokia (ironically for them) at an all time low share price looked pretty obvious. I purchased Nokia shares back in early June @$3.50 for this sole reason. Good luck to Microsoft.... but I still won't be touching its products. I'm waiting for a good Firefox OS phone. Firefox = Freedom.
3 0 [Posted by: linuxlowdown  | Date: 09/03/13 03:06:47 PM]
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5. 
Then there no longer is a phone company called Nokia in Finland. LMAO. Nokia is just a IT and networking company now.
0 0 [Posted by: Teemu Ruskeepää  | Date: 09/04/13 10:04:19 PM]
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