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Microsoft closes $7.2B acquisition of Nokia's Devices and Services arm

updated 08:21 am EDT, Fri April 25, 2014

Nokia's Lumia, Asha, Nokia X business now owned by Microsoft

Microsoft has completed its acquisition of Nokia's mobile phone arm. Originally announced in September last year, the $7.2 billion sale sees Microsoft take control of Nokia's Devices & Services business, including its mobile phone production and a swathe of Nokia patents, with Nokia expecting the final transaction price to be slightly higher than initially reported.

A total of 25,000 employees across more than 130 sites and 50 countries will be transferring over to Microsoft from Nokia, with former Nokia president and CEO Stephen Elop now reporting to Microsoft CEO Satya Nadella as the executive vice president of the Microsoft Devices Group. A ten-year licensing agreement for Nokia's Lumia and Asha brands is also included, as well as the Android-based Nokia X range, with more than 8,500 design patents and 30,000 utility patents and pending patents becoming part of the purchase. It is thought that Microsoft will operate its new mobile phone arm under the name "Microsoft Mobile," and has already taken steps with suppliers to implement the name.

While the acquisition is significant, bringing a large number of established properties to the company as well as a hefty increase in employee numbers, some elements of the original deal will not be making the transition to Microsoft. Nokia's Masan facility in South Korea was excluded from the transaction, with Nokia taking steps to let go of its 200 employees and shut down production.

A larger factory in Chennai, India has been subject to an asset freeze by Indian tax authorities over an unpaid tax bill worth around $3.4 billion for a number of months. Since the factory is also excluded from the acquisition, Nokia is retaining ownership of the facility, and has entered into an agreement with Microsoft to produce mobile devices on its behalf. Employees from both the Masan and Chennai factories will be offered a support program by Microsoft, including financial assistance to "explore opportunities outside Nokia starting from a sound financial base."

Satya Nadella and Stephen Elop
Satya Nadella and Stephen Elop


"Today we welcome the Nokia Devices and Services business to our family. The mobile capabilities and assets they bring will advance our transformation," writes Nadella in a press release. "Together with our partners, we remain focused on delivering innovation more rapidly in our mobile-first, cloud-first world."

Elop wrote on the Nokia Conversations blog that Microsoft is "committed to continuing our support for feature phones, the Asha family, and the Nokia X family of devices," suggesting there could still be some non-Windows Phone devices still to come from the company. "As Microsoft and Nokia Devices and Services come together as an expanded family, we will unify our passion, dedication, and commitment to bring you the best of what our joint technologies have to offer."

Nokia will be revealing more detail over the transaction's closure alongside its first quarter 2014 financial results on April 29th. It is now arranging a Board of Directors meeting for early next week, concerning a strategy assessment dating back to last September. These plans include expansion of its mapping and location services business, develop its network services, build LTE networks, and work on advanced technologies relating to sensing and materials.



By Electronista Staff
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Comments

  1. FastiBook

    Fresh-Faced Recruit

    Joined: 02-17-05

    Well, this is pretty sad. Hope Nokia doesn't go down with the ship......

  1. YangZone

    Fresh-Faced Recruit

    Joined: 05-24-00

    Maybe MS will do for Nokia what it did for Skype?

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