Microsoft has completed the acquisition of Nokia’s handset division, which will boost the US technology group’s ambitions to create a leading mobile devices and services business.
Nokia said Friday it has completed the 5.44 billion-euro ($7.5 billion) sale of its troubled cellphone and services division to Microsoft Corp., ending a chapter in the former world leading cellphone maker’s history that began with paper making in 1865.
The sale of Nokia’s mobile phones arm, which has struggled in the past few years under intense pressure from rivals such as Apple and Samsung, will be made at slightly more than the originally agreed price of €5.4bn.
The closure of the deal, which includes a license to a portfolio of Nokia patents to Microsoft Corp., follows delays in global regulatory approvals, and ends the production of mobile phones by the Finnish company, which had led the field for more than a decade, peaking with a 40-percent global market share in 2008.
Finnish giant Nokia has said the sale of its once-dominant handset business to Microsoft has been closed after the companies agreed to leave two factories – in Chennai, India and Masan, Korea – out of the deal. Nokia said, “Nokia and Microsoft have entered into a service agreement whereby the Chennai factory would produce mobile devices for Microsoft, giving temporary relief to over 7,000 people working directly for the handset maker. The Korean plant, however, which employs approximately 200 people, will be closed.
The company will now focus on networks, mapping services and technology development and licenses, and said it will give more details of the deal and future plans when it releases first-quarter earnings on April 29 – the last report to include the ailing devices and services division.
“The new Nokia can now go forward and concentrate on its remaining assets,” said Neil Mawston from Strategy Analytics, near London. “It has one of the best IPR (intellectual property rights) assets in the entire industry and it has good mapping services.”
Welcoming the completion of the deal, Microsoft CEO Satya Nadella reiterated the focus of the Redmond-headquartered firm on a “mobile-first, cloud-first world,” according to a statement from the US Company. “With the Nokia mobile phone business, Microsoft will target the affordable mobile devices market, a USD 50 billion annual opportunity,” he added.
Satya Nadella, CEO of Microsoft, included an explanation: “The versatile capacities and holdings they bring will propel our conversion. Together with our accomplices, we remain concentrated on conveying improvement all the more quickly in our mobile first and foremost, cloud-first world.”
Microsoft will tackle an extra 25,000 Nokia staff who work in the handset division, and the initiative group of Nokia CEO Stephen Elop, Jo Harlow, Juha Putkiranta, Timo Toikkanen and Chris Weber. Mr Elop, a previous Microsoft official, will get official VP of Microsoft Devices, administering a expanded range that incorporates Lumia cell phones and tablets, Nokia cellular telephones, Xbox equipment, the Surface tablet and embellishments.