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.
Under the terms of the agreement, Microsoft will pay $3.79 billion to purchase substantially all of Nokia’s Devices & Services business, and $1.65 billion to license Nokia’s patents, for a total transaction price of $5.44 billion in cash. Microsoft will draw upon its overseas cash resources to fund the transaction. The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia’s shareholders, regulatory approvals and other closing conditions.
“It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies,” said Microsoft’s outgoing CEO, Steve Ballmer.
“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.”
Nokia said in a statement it expected that Elop, along with senior executives Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber, would transfer to Microsoft when the deal was concluded. It did not say what roles they would take at Microsoft.
Nokia board chairman Risto Siilasmaa would take over CEO duties while the Finnish firm looked for a new CEO, it said.