Microsoft buys Nokia smartphone business for $7.2 billionBy Angel Cuala on Sep 3, 2013 in Business, Technology •
Microsoft buys Nokia‘s Devices & Services business, license Nokia‘s patents, and license and use Nokia‘s mapping services in cold cash, amounting to around $7.2 billion. This is according to the joint press release of Microsoft Corporation and Nokia Corporation this Monday, September 2, 2013, as announced by the Boards of Directors for both companies.
Microsoft and Nokia logos
Credit: Microsoft and Nokia
Under the terms of agreement, Microsoft will pay EUR 3.79 billion (around $5 billion) for the Finland company’s Devices & Services business and EUR 1.65 billion (around $2.2 billion) to license Nokia’s patents. The total amount of the Microsoft-Nokia deal is EUR 5.44 billion ($7.2 billion).
“It’s 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.” Microsoft chief executive officer Steve Ballmer said in the press release.
“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.” Ballmer added, with the deal expected to close in Q1 2014 and still subject to approval by Nokia’s shareholders, regulatory approvals and other closing conditions.
“Building on our successful partnership, we can now bring together the best of Microsoft’s software engineering with the best of Nokia’s product engineering, award-winning design, and global sales, marketing and manufacturing. With this combination of talented people, we have the opportunity to accelerate the current momentum and cutting-edge innovation of both our smart devices and mobile phone products.” Stephen Elop said, who will step down as Nokia President and CEO to become Executive Vice President of Devices & Services of the company.
“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.” Nokia Interim CEO Risto Siilasmaa added.
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