Microsoft to buy out Nokia’s Devices & Services Business, License Patents [EUR 5.44 billion cash Deal]

Did you get a clue of this? In a surprise move Microsoft Corporation announced that it will acquire substantially all of Nokia’s Devices & Services business, license Nokia’s patents, and license and use Nokia’s mapping services. For this deal Microsoft will be shelling out a total of EUR 5.44 billion in cash to Nokia, out of which Microsoft will pay EUR 3.79 billion to purchase substantially all of Nokia’s Devices & Services business, and EUR 1.65 billion to license Nokia’s patents.

That’s big, by first quarter of 2014 Nokia Device business will be owned by Microsoft Corporation, subjected to approval by Nokia’s shareholders, regulatory approvals and other closing conditions. Earlier in February 2011 Microsoft entered into a exclusive partnership with Nokia to build Windows Phone devices and essentially keep Nokia away from the Google Android ecosystem. This new deal will essentially bring a world class mobile hardware business under the Microsoft hand and help them in building next-generation Lumia/ Windows Phone based mobile devices.

“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. 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.” said Steve Ballmer, Microsoft chief executive officer.

“For Nokia, this is an important moment of reinvention and from a position of financial strength, we can build our next chapter. The deal offers future opportunities for many Nokia employees as part of a company with the strategy, financial resources and determination to succeed in the mobile space.” said Risto Siilasmaa, Chairman of the Nokia Board of Directors.

“Building on our successful partnership, we can now bring together the best of Microsoft’s software engineering with the best of Nokia’s product engineering, award-winning design, and global sales, marketing and manufacturing. With this combination of talented people, we have the opportunity to accelerate the current momentum and cutting-edge innovation of both our smart devices and mobile phone products” said Stephen Elop, Nokia President and CEO.

Main highlight of Microsoft-Nokia Deal –

• EUR 5.44 billion cash deal
• 32,000 Nokia employes will be transfer to Microsoft, including 4,700 people in Finland and 18,300 employees directly involved in manufacturing, assembly and packaging of products worldwide
• Stephen Elop will step down as Nokia President and CEO to become Nokia Executive Vice President of Devices & Services
• Microsoft will be acquiring Nokia’s Smart Devices business unit, including the Lumia brand and products.
• Microsoft will acquire the Asha brand and will license the Nokia brand for use with current Nokia mobile phone products. Nokia will continue to own and manage the Nokia brand.
• Nokia is assigning to Microsoft its long-term patent licensing agreement with Qualcomm, as well as other licensing agreements.
• Nokia will retain its patent portfolio and will grant Microsoft a 10-year license to its patents at the time of the closing. Inaddition Microsoft will grant Nokia reciprocal rights to use Microsoft patents in its HERE services.
• Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four-year license.

Is it the end of one’s world dominant mobile manufacturer Nokia? Lay down you thoughts on it.