Microsoft Deals With Nokia, announced late on Monday that Microsoft will acquire Nokia’s phone-making unit for about $7.2 billion in total — including patents — allowing the (now) former Finnish phone maker to expand its presence and technologies in other markets.
The rationale behind the deal is to secure the Windows Phone ecosystem, as well as accelerating Microsoft’s phone market share. In a presentation published on Monday (PDF), Microsoft said it wants to bring “one brand” through a “united voice.”
Nokia will retain its other technology units, including Nokia Solutions and Networks (formerly Nokia-Siemens Networks), Nokia Here, its CTO office, and its patent portfolio.
With so many moving parts, we’ve picked out the key facts of the complicated, lengthy, and likely to be scrutinized deal, which is expected to close in the first quarter of 2014.
- The deal is split between the phone-making unit and Nokia’s patents. Microsoft will spend $5 billion (€3.79bn) on the phone-making unit, and $2.17 billion (€1.65bn) on licensing Nokia’s patents.
- Nokia chief executive Stephen Elop, who previously served as an executive at Microsoft, will once again join the software giant, heading up the phone-making division that Microsoft just bought.
- Nokia will retain its patent portfolio, but will give Microsoft a 10-year license to its patents at the time of the deal closing.
- 32,000 Nokia employees will transfer to Microsoft, including 4,700 people in Finland.
- Nokia sold 7.4 million Lumia smartphones in the second quarter of 2013.
- Microsoft’s Julie Larson-Green, currently in charge of the company’s own devices and studios team, will continue to work on the Xbox One and Surface devices, but will join Elop’s team once the deal closes.
- Microsoft will build a datacenter in Finland that will serve Microsoft and Nokia customers in Europe. More than $750 million in capital will be spent on the new datacenter over the next few years.
- All Microsoft and Nokia global marketing will fall under current executives Tami Reller and Mark Penn.
- During that same quarter, Microsoft sold 53.7 million units of its feature phone range.
- Microsoft will make available to Nokia about €1.5 billion ($1.97bn) in financing in the form of three payments of €500 million ($659m) from oversees resources.
- Nokia shareholders are expected to vote on the deal in an extraordinary general meeting on November 19 this year.
Besides that, Ballmer noted in an email, “There are no significant plans to shift where work is done in the world as we integrate, so we expect the Nokia teams to stay largely in place, geographically.”
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