Microsoft to acquire Nokia's devices business
Software giant to pay $7.1bn in cash for devices business and Nokia's patents
Microsoft Corp and Nokia Corp have 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 and 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 and Services business, and €1.65 billion to license Nokia's patents, for a total transaction cost of €5.44bn ($7.1bn) in cash.
Microsoft said it 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.
Microsoft said in a statement that building on the partnership with Nokia announced in February 2011 and the increasing success of Nokia's Lumia smartphones, it aims to accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing.
"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," said Steve Ballmer, Microsoft chief executive officer.
"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.
"We are excited and honoured to be bringing Nokia's incredible people, technologies and assets into our Microsoft family. Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we anticipate a smooth transition and great execution.
"With ongoing share growth and the synergies across marketing, branding and advertising, we expect this acquisition to be accretive to our adjusted earnings per share starting in fiscal year 2015, and we see significant long-term revenue and profit opportunities for our shareholders."