FP Staff Sep 3,2013 35 mins ago
Microsoft Corp on Tuesday said it will buy Nokia’s mobile phone business for 5.44 billion euros.
The deal is expected to close in the first quarter of 2014 and it is subject to approval by Nokia’s shareholders and regulatory approvals. Nokia partnered in 2011 with Microsoft and uses Microsoft’s Windows software to run its line of Lumia mobile phones.
A statement by Nokia said, “Subject to the closing of the transaction, Microsoft will acquire substantially all of Nokia’s Devices & Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services production facilities, Devices & Services-related sales and marketing activities, and related support functions”.
It added that at closing, “approximately 32,000 people are expected to transfer to Microsoft, including approximately 4,700 people in Finland. Nokia’s CTO (Chief Technology Officer) organization and patent portfolio will remain within the Nokia Group. The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50%, of Nokia’s net sales for the full year 2012.”
An email by Microsoft CEO Steve Ballmer to employees said that the move was a ‘smart acquisition’ for Microsoft, and a good deal for both companies. “We are receiving incredible talent, technology and IP. We’ve all seen the amazing work that Nokia and Microsoft have done together. Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we expect a smooth transition and great execution”, he wrote.
Ballmer’s email also confirmed that Nokia CEO Stephen Elop would be coming back to Microsoft, to lead an expanded Devices team. He added that a number of key engineering leaders as well as the Nokia sales team would be kept intact.
The move comes even as a report in the International Business Timessaid that Elop was a front runner to take over the reigns of the company once Ballmer had retired. “The former Microsoft exec who left in 2010 to lead Nokia from its burning platform is widely tipped as favourite to land the top job at his former company, and Ladbrokes have him at odds of just 2/1 to be the next Microsoft CEO.”, it said.
A report in TheNextWeb said, “Microsoft’s move to purchase Nokia’s devices and services business is a smart one, considering that Nokia has been one of its most loyal partners to date (and this could probably explain the rumor that Nokia is making a 10.1 inch Windows RT tablet).
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