Microsoft is to buy Nokia’s mobile phone unit and its patents in an all cash €5.4bn takeover deal.
The move, predicted last week on bobsguide, will be one of the final big acts of the departing chief executive officer (CEO) of Microsoft, Steve Ballmer, who is the leave the technology giant within a year.
Conceivably, he could now be replaced by Stephen Elop, as Nokia’s CEO is in-line to return to Microsoft to head up the integrated mobile phone business. Risto Siilasmaa, Nokia’s chairman will remain as the interim chief executive and leader of the remaining telco business.
The takeover deal involves a €3.79bn fee for “substantially all” of Nokia’s phone unit, according to the ‘FT’ and €1.65bn to license its patents.
Market Reaction and Analysis
According to Robert Rutherford, CEO of IT consultancy, QuoStar Solutions: “Microsoft was slow out of the blocks in the mobile market, but in the past it has repeatedly shown that the more considered approach can pay dividends in the long run [suggesting its acquisition of Nokia’s mobile phone business may be a shrewd move].
"News of the Nokia purchase will put pressure on some of the other big names in the consumer smartphone market, but it’s the business implications that make this deal so interesting," continued Rutherford. "While firms like Apple, Samsung and HTC focus their attention on consumer technology, Microsoft has been blazing the way in building a suite of business compatible devices. The acquisition of Nokia’s phone business could be the final piece of the puzzle.”
• For more analysis please see the bobsguide blog.