nokia microsoftTaking a “bold step” into its mobile future, Microsoft has purchased Nokia’s Devices and Services Businesses. This means the company will acquire Nokia’s smartphone and mobile phone businesses, design team, world-wide manufacturing and assembly facilities around the world, as well as operations, sales, marketing and support teams.

Under the terms of the agreement, Microsoft will pay a total transaction price of EUR 5.44 billion, U.S. 7.17 billion in cash. Expected to close in the first quarter of 2014, the purchase includes EUR 3.79 billion to for substantially all of Nokia’s Devices & Services business, and EUR 1.65 billion to license Nokia’s patents.

“We are very excited about the proposal to bring the best mobile device efforts of Microsoft and Nokia together,” Microsoft CEO Steve Ballmer stated in an email to Microsoft employees.  “Our Windows Phone partnership over the past two and half years has yielded incredible work – the stunning Lumia 1020 is a great example. Our partnership has also yielded incredible growth. In fact, Nokia Windows Phones are the fastest-growing phones in the smartphone market.”

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.

Microsoft offers more information on the transaction through its strategic rationale presentation online.

 

 

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