Microsoft to acquire Nokia's phone business for $7.2B
As reported by cnet:
The software giant will pay $5 billion for "substantially all" of Nokia's phone unit and another $2.2 billion to license its patents, the companies announced late Sunday. As part of the deal, Stephen Elop will step down as Nokia chief executive to become the executive vice president of the devices and services division. Elop, a former Microsoft executive, is one of a handful of candidates suggested to replace Microsoft Steve Ballmer, who is expected to retire by next summer.
"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," Elop said in a statement. "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."
The acquisition suggests that like Apple, Microsoft believes it needs more direct control of handset manufacturing to succeed in the smartphone market. The relationship between Microsoft and Nokia began in February 2011 when Elop, who had arrived at the beleaguered Finnish handset maker from Microsoft five months earlier, announced at a developer's conference that Nokia was adopting Windows Phone 7 as its primary smartphone OS.
Despite market domination by Android and Apple's iOS, handsets running Microsoft's Windows Phone operating system seem to be gaining in popularity, especially among new users. Kantar Worldpanel ComTech reported this weekend that at the end of July Windows Phone dominated 8.2 percent of the five major European markets, including the UK, France, and Germany.
The deal, which is expected to close in the first quarter of 2014, is still subject to shareholder and regulatory approval. When the deal closes, approximately 32,000 Nokia employees will transfer to Microsoft, including 4,700 in Finland and 18,300 involved in manufacturing.
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Source: cnet.com