Microsoft acquires Nokia’s devices and services division, includes Lumias and more
This just in, Microsoft has announced that they will be acquiring most of Nokia’s business for $7.2 billion dollars. Microsoft will be acquiring Nokia’s Devices and Services business, which includes the company’s Mobile Phones and Smart Devices business units. Not only that, Microsoft will now license Nokia’s patents and license and use Nokia’s mapping services.
Microsoft will pay Nokia a total of EUR 3.79 billion to purchase Nokia’s Devices & Services business and EUR 1.65 billion to license Nokia’s patents, for a total acquisition price of EUR 5.44 billion in cash, or $7.2 billion US dollars.
“Under the terms of the agreement, Microsoft will acquire substantially all of Nokia’s Devices and Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services-related production facilities, Devices & Services-related sales and marketing activities, and related support functions,” Microsoft stated in a press release.
“At closing, approximately 32,000 people are expected to transfer to Microsoft, including 4,700 people in Finland and 18,300 employees directly involved in manufacturing, assembly and packaging of products worldwide. The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50 percent of Nokia’s net sales for the full year 2012,” Microsoft added.
Thanks to this acquisition, Microsoft will also own the Lumia smartphone brand. The Lumia smartphone brand currently runs Microsoft’s Windows Phone 8 and has allowed Microsoft’s mobile platform to achieve a boost in market share. Microsoft will also be entering into a few licensing agreements, especially with Qualcomm.
Microsoft will enter into a 10 year licensing agreement with Nokia for its patents. The devices and services giant will also become a “strategic licensee” of the HERE platform and will separately pay Nokia for a four-year license.
“Microsoft will acquire the Asha brand and will license the Nokia brand for use with current Nokia mobile phone products. Nokia will continue to own and manage the Nokia brand. This element provides Microsoft with the opportunity to extend its service offerings to a far wider group around the world while allowing Nokia’s mobile phones to serve as an on-ramp to Windows Phone,” Microsoft added.
Once the acquisition goes through, several Nokia executives will transfer to Microsoft. These executives include CEO Stephen Elop, Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber. Microsoft will use a new center in Finland to serve Microsoft consumers in Europe.
This acquisition will finalize by the first quarter of 2014. How do you feel about this huge news? Let us know in the comments below!Further reading: Microsoft, Nokia, Windows Phone