By Vijay @ 11:21am
Microsoft Corporation and Nokia Corporation today announced that the
Boards of Directors for both companies have decided to enter into a
transaction whereby Microsoft will purchase substantially all of Nokia’s
Devices & Services business, license Nokia’s patents, and license
and use Nokia’s mapping services.
Under the terms of the agreement, Microsoft will pay EUR 3.79 billion
to purchase substantially all of Nokia’s Devices & Services
business, and EUR 1.65 billion to license Nokia’s patents, for a total
transaction price of EUR 5.44 billion in cash. Microsoft will draw upon
its overseas cash resources to fund the transaction. The transaction is
expected to close in the first quarter of 2014, subject to approval by
Nokia’s shareholders, regulatory approvals and other closing conditions.
Building on the partnership with Nokia announced in February 2011 and
the increasing success of Nokia’s Lumia smartphones, Microsoft aims to
accelerate the growth of its share and profit in mobile devices through
faster innovation, increased synergies, and unified branding and
marketing. For Nokia, this transaction is expected to be significantly
accretive to earnings, strengthen its financial position, and provide a
solid basis for future investment in its continuing businesses.
“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. “In addition to their innovation and
strength in phones at all price points, Nokia brings proven capability
and talent in critical areas such as hardware design and engineering,
supply chain and manufacturing management, and hardware sales, marketing
and distribution.”
“We are excited and honored to be bringing Nokia’s incredible people,
technologies and assets into our Microsoft family. Given our long
partnership with Nokia and the many key Nokia leaders that are joining
Microsoft, we anticipate a smooth transition and great execution,”
Ballmer said. “With ongoing share growth and the synergies across
marketing, branding and advertising, we expect this acquisition to be
accretive to our adjusted earnings per share starting in FY15, and we
see significant long-term revenue and profit opportunities for our
shareholders.”
“For Nokia, this is an important moment of reinvention and from a
position of financial strength, we can build our next chapter,” said
Risto Siilasmaa, Chairman of the Nokia Board of Directors and, following
today’s announcement, Nokia Interim CEO. “After a thorough assessment
of how to maximize shareholder value, including consideration of a
variety of alternatives, we believe this transaction is the best path
forward for Nokia and its shareholders. Additionally, the deal offers
future opportunities for many Nokia employees as part of a company with
the strategy, financial resources and determination to succeed in the
mobile space.”
“Building on our successful partnership, we can now bring together
the best of Microsoft’s software engineering with the best of Nokia’s
product engineering, award-winning design, and global sales, marketing
and manufacturing,” said Stephen Elop, who following today’s
announcement is stepping aside as Nokia President and CEO to become
Nokia Executive Vice President of Devices & Services. “With this
combination of talented people, we have the opportunity to accelerate
the current momentum and cutting-edge innovation of both our smart
devices and mobile phone products.”
Nokia has outlined its expected focus upon the closing of the transaction in a separate press release published today.Source: Microsoft
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