Microsoft Buy Out Rivals Nokia

Taking the surprising but logical next step in the relationship they have generated, American computer giants Microsoft have announced plans to purchase their recent Finnish partner where smartphones are involved, with the ‘Devices & Services’ division of Nokia set to be handed over in a multi-billion dollar deal.

nokia_microsoft_partnershipValued at $7.16b (€5.43b, £4.6b), the money handed over in the deal will approximately take on a 70:30 split for ‘substantially all’ of Nokia’s phone divisio) and licencing of all patents the company holds, respectively, according to the two parties.

Whilst the main term of the deal is naturally that all of the above will soon belong to Microsoft (but presumably not renamed as such to avoid causing confusion and complete uproar in Finland over one of their proudest exports (amongst other reasons)), additional agreements include that Nokia’s current CEO Stephen Elop (pictured left) will step down from his position, taking on a new role as ‘executive vice-president’ of Microsoft’s new Devices & Services division.

A further term will be the transfer of over 32,000 employees of Nokia at a level below Elop will be transferred to Microsoft contracts, including 18,300 ‘product manufacturers’, and 4,700 Finnish-based staff.

Although the deal is incomplete, talks are believed to have been ongoing since June, with the final areas of agreement now close to being finalised. After a process of being approved by Nokia shareholders (who recently authorised a full takeover of a telecommunications partnership with Siemens) and ‘competition regulators’, the deal, should nothing intervene, press ahead for closure as of Q1 2014.

Describing the arrangement as ‘a bold step into the future’, outgoing CEO of Microsoft Steve Ballmer (pictured right) said of the purchase: “[It is] 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.”

Founded in 1865, Nokia’s long 148-year history as an independent conglomerate is not yet complete, with three divisions remaining with the company post-takeover, as they promise to channel their focus into the ‘telecommunications equipment’, mapping (HERE), and ‘Advanced Technologies’ markets. While that will naturally mean they have a much lower profile both within Finland and internationally until one of those three sections develops something of note, the question remains as to whether Microsoft will keep the Nokia name alive on smartphone products…


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