Tuesday, 3 September 2013
[ BREAKING ] : Microsoft to buy Nokia mobile phone business for £4.6 billion ( READ )
The global software giant will acquire the Nokia unit that makes mobile phones and patents in a deal expected to be completed in early 2014. Microsoft has announced it is to buy the mobile phone arm of Nokia for £4.6 billion.
The global software giant will acquire the Nokia unit that makes mobile phones in a deal expected to be completed in early 2014. As part of the buyout, 32,000 Nokia employees will transfer to Microsoft, which will also be given a 10-year licensing agreement to use the Finnish firm's patents.
Outgoing Microsoft boss Steve Ballmer, who announced plans to retire last month, said: "It's a bold step into the future - a win-win for employees, shareholders and consumers of both companies."
The mammoth deal is the second in 24 hours in the telecoms sector after UK-based Vodafone last night confirmed the sale of its 45% stake in US firm Verizon Wireless for $130 billion (£84 billion) - providing investors with a £54 billion cash and shares windfall.
Nokia, once the world's biggest mobile phone manufacturer, will now become a telecoms equipment maker, representing a dramatic change in its near 150-year history.
For Microsoft, the deal marks an ambitious attempt to expand its share of the mobile devices market, with commentators saying the firm was slow to respond to demand and being overtaken by the likes of Samsung and Apple.
Mr Ballmer added: "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 and Microsoft first teamed up in February 2011 on the Lumia smartphones.
Stephen Elop, Nokia president and chief executive, will step down to become head of the Nokia devices and services business within Microsoft, returning to his former company.
He is among the favourites to take over from Mr Ballmer, who plans to retire within the next 12 months.
Mr Elop said the deal provides the "opportunity to accelerate the current momentum and cutting-edge innovation of both our smart devices and mobile phone products".
Microsoft and Nokia are understood to have been in negotiations since the end of January.
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