Microsoft has inked a deal to buy Nokia’s mobile phone business as well as license Nokia’s patents and mapping services for EUR 5.44 billion (£4.6 billion).
Nokia’s Devices and Services business accounted for EUR 3.79 billion of the purchase price, while the remaining EUR 1.65 billion is paid for the patent licensing deal.
It should be noted that although Microsoft and Nokia entered into a partnership two years ago, this new deal indicates a more serious collaboration between the two firms.
The deal will see Stephen Elop stepping aside as President and Chief Executive Officer of Nokia to take on a new role as Microsoft’s “Nokia Executive Vice President of Devices & Services”.
The move has even sparked rumours that Elop will soon helm Microsoft.
Meanwhile, Microsoft CEO Steve Ballmer called the deal “a bold step into the future – a win-win for employees, shareholders and consumers of both companies.”
Aside from Nokia’s innovation in phones, the deal will also enable Microsoft to tap into Nokia’s proven capability in key areas such as supply chain and manufacturing management; hardware design and engineering; and hardware sales, distribution and marketing.
While this may seem to be the end for Nokia, the company still plans to move forward as somewhat of a standalone entity.
Nokia’s current interim CEO and board chairman Risto Siilasmaa said the deal marks “an important moment of reinvention” for the company. It also opens up new opportunities for Nokia employees.