Nokia To Sell Mobile Phone Business to Microsoft

Nokia  today announced that it has signed an agreement to enter into a transaction whereby Nokia will sell substantially all of its entire Mobile Devices,  Smart phones  & Services business and licence its patents to Microsoft for EUR 5.44 billion in cash, payable at closing.

Nokia to sell Mobile Business to Microsoft

Subject to the closing of the transaction, Microsoft will acquire substantially all of Nokia’s Devices & Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services production facilities, Devices & Services-related sales and marketing activities, and related support functions.

Microsoft is acquiring Nokia’s Smart Devices business unit, including the Lumia brand and products. Lumia handsets have won numerous awards and have grown in sales in each of the last three quarters, with sales reaching 7.4 million units in the second quarter of 2013.

As part of the transaction, Nokia is assigning to Microsoft its long-term patent licensing agreement with Qualcomm, as well as other licensing agreements.

Microsoft is also acquiring Nokia’s Mobile Phones business unit, which serves hundreds of millions of customers worldwide, and had sales of 53.7 million units in the second quarter of 2013. Microsoft will acquire the Asha brand and will license the Nokia brand for use with current Nokia mobile phone products.

As part of the transaction, Nokia will grant Microsoft a 10 year non-exclusive license to its patents as of the time of the closing, and Microsoft will grant Nokia reciprocal rights related to HERE services.

In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement to perpetuity. Of the total purchase price of EUR 5.44 billion, EUR 3.79 billion relates to the purchase of substantially all of the Devices & Services business, and EUR 1.65 billion relates to the mutual patent agreement and future option.

Additionally, Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four year license. This revenue stream is expected to substantially replace the revenue stream HERE is currently receiving from Nokia’s Devices & Services business internally. If the transaction closes Microsoft is expected to become one of the top three customers of HERE.

Nokia expects to book a gain on sale of approximately EUR 3.2 billion, and expects the transaction to be significantly accretive to earnings.The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia shareholders, regulatory approvals and other customary closing conditions.

Following the transaction, Nokia plans to focus on its three established businesses, each of which is a leader in enabling mobility in its respective market segment, NSN, a leader in network infrastructure and services; HERE, a leader in mapping and location services; and Advanced Technologies, a leader in technology development and licensing. At closing, this transaction is expected to strengthen Nokia’s financial position and provide a solid basis for future investment in these three businesses.

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29 Comments on "Nokia To Sell Mobile Phone Business to Microsoft"

 

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Rama
September 15, 2013 12:17 pm 12:17 PM
The actual truth behind nokias acquisition by microsoft .We all know that nokia was the largest phone manufacture around 7 years back but then came ios in 2007 and people started to look at mobile phones in a different way but still it did not prove to be a real threat for nokia as iphones were always expensive and hence did not bite much out of nokias market share but the real challenge came in 2010 when a tiny green robot called android started booming .Several symbian manufacturers like samsung and sony jumped to android but nokia stuck to symbian… Read more »
raj
September 4, 2013 12:32 pm 12:32 PM

100% TRUE..

arrogrant to respect people’s demand (dual sim and android os)

Quality has fallen to a low level that people didn’t expect from nokia.

Finally unable to identify the trojan horse…U people knew about this 🙂

September 4, 2013 11:31 am 11:31 AM

Microsoft bought Skype for $8.5 billion. But they value Nokia just $7 billion.

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