Microsoft reaches a Deal to acquire Nokia Devices and Services
We first heard that the Microsoft’s plan to acquire Nokia a while ago and now it has become true. Microsoft and Nokia have announced that Redmond company has reached a deal to take over the Nokia’s devices and services units which include Nokia’s smartphone and mobile phone businesses, their design team, manufacturing and assembly facilities around the world, and employees devoted to operations, sales, marketing and support.
By acquiring Nokia, the Redmond giant is joining ever growing mobile phone business and the company should be expecting to expand the availability of Windows phone smartphones utilizing Nokia’s technology and patents. Amalgamation of two giants should bring more innovation in the future. Via partnership of the past two and half years, Microsoft has already gained a foothold and more credibility in the smartphone business with its Windows Phone OS, even though it hasn’t helped Nokia much to regain its past glory, which started to decline in the past three years under Stephen Elop.
“With the commitment and resources of Microsoft to take Nokia’s devices and services forward, we can now realize the full potential of the Windows ecosystem, providing the most compelling experiences for people at home, at work and everywhere in between”.
“We will continue to build the mobile phones you’ve come to love, while investing in the future – new phones and services that combine the best of Microsoft and the best of Nokia.” Said in an open letter from Steve Ballmer and Stephen Elop.
Based on the agreement between the Nokia and Microsoft, the Microsoft will pay €3.79 billion for the Nokia devices and services business. The Microsoft will also pay an additional €1.65 billion for a 10-year license to use the patents. So the total sum of the deal is €5.44 billion. Regardless of the deal, the Finnish company is free to license their patents to other companies as well.
With this deal, Nokia’s CEO, Stephan Elop will also be returning to the Microsoft, where he will lead the device division while Risto Siilasmaa will act Nokia’s CEO.
The transaction is expected to close in the first quarter of the 2014 after usual process of approval by Nokia shareholders. When the deal closes, all employees working for the finish company will transfer to Microsoft that include total of 32000 people, from which 4,700 are in Finland and 18,300 of them are directly involved in manufacturing and assembling of Nokia products worldwide.