Microsoft Corporation and Nokia Corporation today announced that the Boards of Directors for both companies have decided to enter into a transaction whereby Microsoft will purchase substantially all of Nokia's Devices & Services business, license Nokia's patents, and license and use Nokia's mapping services, - reads the officials statement on both Microsoft and Nokia Websites.
The agreement suggests that Microsoft will pay EUR 3.79 billion to purchase substantially all of Nokia’s Devices & Services business, and EUR 1.65 billion to license Nokia’s patents. So the total value of the transaction is EUR 5.44 billion in cash. The Redmond Company is said to draw upon its overseas cash resources to fund the transaction, which is expected to close in the first quarter of 2014, subject to approval by Nokia’s shareholders, regulatory approvals and other closing conditions.
Microsoft has published a presentation on its website, which clarifies the company’s aims - aims to accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing.
On the other hand, Nokia expects to receive more lucrative earnings, strengthen its financial position, and provide a solid basis for future investment in its continuing businesses.
Steve Ballmer, Microsoft chief executive officer, commented: “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.”
As for Stephen Elop, who is going to step aside as Nokia President and CEO to become Nokia Executive Vice President of Devices & Services, he added: “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. 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.”
What are your thoughts of Microsoft acquiring Nokia? Do not hesitate to share your opinion in the comments below!