Microsoft to Buy Nokia’s Device Business in Deal Worth $7.17 Billion

Microsoft announced late Monday that it is buying the majority of Nokia’s cellphone unit for 3.79 billion Euros ($5 billion), and spending another 1.65 billion Euros ($2.18 billion) to license Nokia’s patent portfolio, for a total of 5.44 billion Euros ($7.17 billion).

Once the deal is done, a number of Nokia executives will join Microsoft, including Stephen Elop, a former Microsoft executive who is seen as among the top contenders to replace CEO Steve Ballmer. Also set to join Microsoft are Jo Harlow, Juha Putkiranta, Timo Toikkanen and Chris Weber.
For now, Elop is stepping aside as Nokia CEO to become executive VP of devices and services. Nokia Chairman Risto Siilasmaa will serve as interim CEO.




“For Nokia, this is an important moment of reinvention, and from a position of financial strength, we can build our next chapter,” said Siilasmaa “After a thorough assessment of how to maximize shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders.”
The move is a clear sign that Microsoft believes it can and must succeed in the phone business, and that it cannot afford to leave the success in the hands of a partner – even one like Nokia, that had bet its future on Microsoft’s phone software.
Nokia agreed in February 2011 to make Windows Phone its primary play in smartphones, and their mobile fortunes have already been closely tied. So far, the combination has managed to pass BlackBerry, but remains a distant No. 3 platform to Google’s Android and Apple’s iOS.