In a surprise move, Microsoft has got into an agreement with Nokia to purchase “substantially all of Nokia’s Devices & Services business, license Nokia’s patents, and license and use Nokia’s mapping services,” for $7.17 Billion announced the company.
The transaction is expected to close in the first quarter of 2014 and is subjected to approval by Nokia’s shareholders, regulatory approvals and other closing conditions. Total transaction price will be EUR 5.44 billion, Microsoft will be paying EUR 3.79 billion to purchase substantially all of Nokia’s Devices & Services business, and EUR 1.65 billion to license Nokia’s patents.
“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,” said Risto Siilasmaa, Chairman of the Nokia Board of Directors.
“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,” said Steve Ballmer, Microsoft chief executive officer. “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.”
Though Nokia has fallen behind Apple and Samsung in the smartphone race and a report by Gartner also showed that Samsung leads the mobile phone market with 31.7% in Q2 2013 against Nokia.
“Today’s announcement doesn’t change that – acquiring Nokia’s Devices group will help make the market for all Windows Phones, from Microsoft or our (device maker) partners,” Terry Myerson, Microsoft executive VP, said in a blog post.
With the deal, Stephen Elop, who previously joined Nokia after leaving Microsoft, will go back to the software major and be the Nokia Executive Vice President of Devices & Services. This also increases speculation that might be Stephen Elop could replace Steve Ballmer as the next CEO of Microsoft after Steve steps down from Microsoft.
At present Blackberry is also looking for a buyer.
To contact the author, email firstname.lastname@example.orgCategory Investments News