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Microsoft to buy Nokia mobile phone unit for £3.2b

Microsoft has acquired Nokia’s mobile division (known as the Devices and Services Business) as well as licensing the company’s patents and committed to license and use Nokia’s mapping services in its own.

Microsoft will pay a mere £3.2 billion for the mobile business with an additional £1.4 billion to cover the cost of licensing Nokia’s patents for ten years with an option to extend the agreement in perpetuity. 32,000 Nokia employees are to join Microsoft as well and power a division that netted Nokia around £13 bn in revenue in 2012.

The NYSE was closed on the 2 September for Labor Day and it will be interesting to see how the market reacts to this acquisition. The transaction is expected to be completed early next year subject to approval by regulatory bodies and Nokia shareholders.

Steve Ballmer, who recently announced that he will be departing in 2014 (opens in new tab), said in a statement “It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies”.

We have been mulling the idea of such a deal since May 2011, at a time when Nokia was still a potent force. In early 2012, rumours of a potential acquisition emerged again courtesy of Russian blogger, Eldar Murtazin.

Since then, Nokia has been increasingly reliant on Microsoft after having committed its future and its fortune to Windows Phone; its Lumia range sold 7.4 million unit in the second quarter of 2013.

The finer details of the deal include Stephen Elop returning to its former employee, Microsoft now owning a Symbian platform and being able to use the Nokia brand.

Désiré Athow
Désiré Athow

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.