Microsoft made a surprise announcement on it’s news centre that it plans to acquire Nokia’s devices and services business, as well as license Nokia’s patents and mapping services in a $7.2 billion deal.
The deal still needs to be approved by Nokia’s shareholders, with an extraordinary general meeting planned for November, and the deal is expected to close in the first quarter of 2014. Specifically, Microsoft will spend $5 billion to buy the devices and services division and $2.2 billion to license the patents.
“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,” said Steve Ballmer, Microsoft chief executive officer.
The deal will see 32,000 Nokia employees transfer to Microsoft. Nokia CEO, Stephen Elop will be returning to Microsoft as Executive Vice-President of the Devices and Services division. While Risto Siilasmaa, Chairman of the Nokia Board of Directors, stepping up to act as Interim CEO. Analysts believe that Elop is on the short list to become the next Microsoft CEO after Ballmer steps down from the position in the next twelve months.