In a move that isn’t in the least surprising, Nokia has announced that Microsoft will buy its Devices & Services business, as well as licensing Nokia’s patents and mapping services. Such is being done for 5.44 billion Euros in all-cash, something that breaks down into 3.79 billion Euros for the Devices & Services Business and 1.65 billion Euros for the patent licensing.
Such a hefty payout is being accomplished via Microsoft’s overseas cash resources, with the entire deal expected to be wrapped up some time in Q1 of next year. The completion of the acquisition will be contingent on a few things, not the least of which is regulatory approval, the go-ahead from Nokia’s shareholders, and meeting the prescribed closing conditions.
Microsoft’s plans once it finalizes the business matters is to boost its profits and shares regarding mobile devices, doing so with a mixture of “increased synergies”, more rapid innovation, and a more unified marketing and branding approach. And Nokia, meanwhile, is expected to reap rewards from this move, seeing a strengthening of its financial profile, gaining a more solid investment foundation, and more.
Said Microsoft CEO Steve Ballmer: “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. 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.”
Getting into the details, Microsoft is acquiring “substantially all” of the Devices and Services Business, of which that encompasses the Mobile Phones and Smart Devices units, the design team, all related operations and production facilities, sales and marketing, and support. About 32,000 workers will be transferred to Microsoft once the deal closes.