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.
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