Microsoft and Nokia have announced that Microsoft will acquire Nokia’s handset business, its Devices & Services business, for EUR 5.44B ($7.166B) in cash upon closing. The transaction will transfer 32,000 employees to Microsoft’s employment and the Windows Phone and Nokia Lumia brand names will unite under one roof.
Microsofts started its close partnership with Nokia in 2011 in a venture to help spur Windows Phone development. The Nokia Lumia family has been a big name in Windows Phone ever since. Microsoft’s outright purchase of Nokia’s Devices & Services gives it direct control over the Lumia brand name and is expected to give Microsoft a leg up in the smartphone race against Apple’s iOS and Google’s Android services.
“It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies,” said Microsoft’s outgoing CEO Steve Ballmer. “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.”
Nokia CEO Stephen Elop will be stepping down from his position at Nokia and will take up the role as chief of Microsoft’s new Devices team. Nokia stands to gain EUR 3.2B ($4.22B) from the deal, and it will continue to focus on network infrastructure, mapping and location, and further technology development after the transaction is completed.
“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.