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Microsoft confirms Nokia buyout deal, will acquire devices and services divisions

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Microsoft has announced that it is to buy the devices and services arms of former Finnish phone giant Nokia, just two years after the manufacturer agreed to solely make Windows Phone smartphones.

Mooted to have been on the cards for some time, Microsoft and Nokia made a joint announcement this morning, September 3, with the two companies agreeing on an overall fee of €5.44 billion (£4.6bn). It is expected that the final deal will be completed during the first quarter of 2014.

It's a bold step into the future - a win-win for employees, shareholders and consumers of both companies,” Steve Ballmer, Microsoft’s outgoing CEO stated in an announcement confirming the buyout. He added: “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."

While Microsoft will pay €3.79 billion (£3.2bn) for Nokia’s devices and services division, a sector that includes the company’s smartphone manufacturing arm, it has been revealed that the Surface Pro and Xbox One maker will also splash out a considerable €1.65 billion (£1.4bn) to snap up the rights to license Nokia’s patents and mapping services.

With Nokia’s CEO Stephen Elop announced to be stepping down from his role at the company, Nokia Chairman and interim CEO Mr. Siilasmaa stated: “Today is an important moment of change and reinvention for Nokia and its employees," said. "With our strong corporate identity, leading assets and talent, and from a position of renewed financial strength, we will build Nokia's next chapter."

Having recently unveiled a selection of new Windows powered handsets from the budget likes of the Nokia Lumia 520 to the more premium and camera centric Nokia Lumia 1080, Nokia’s devices division is expected to launch further products before the deal is finalised, with the first Nokia Lumia tablet on the cards for an October unveiling.

A move that will see Microsoft attempt to further push its Windows Phone platform on a smartphone market dominated by iOS and Android based products, the two companies have confirmed that 32,000 Nokia employees will move to employ of Microsoft once the deal is formally penned.

"We are excited and honored to be bringing Nokia's incredible people, technologies and assets into our Microsoft family,” Ballmer stated.
"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."

He added: “Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we anticipate a smooth transition and great execution.”

Stephen Elop, who following the announcement will no longer hold the position of Nokia CEO said: "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."

The man who will now become Nokia Executive Vice President of Devices & Services added: "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."

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