As expected, Microsoft today announced the completed acquisition of Nokia’s Devices and Services business. The acquisition was approved by Nokia shareholders as well as by government agencies around the world.
Former Nokia President and CEO Stephen Elop will now serve as executive vice president of the Microsoft Devices Group, and report to Microsoft CEO Satya Nadella. He will oversee not just Nokia mobile phones, Lumia smartphones and tablets, but also Xbox hardware, Surface, Perceptive Pixel (PPI) products, and accessories.
Elop also published an open letter relaying his thoughts on the news:
Today we are announcing that the acquisition of substantially all of the Nokia Devices and Services business by Microsoft has reached completion, following approval by Nokia shareholders and regulatory authorities.
Six months ago, we announced our plans to bring the best of Microsoft and Nokia Devices and Services business together. Today is an exciting day as we join the Microsoft family, and take the first, yet important, step in our long-term journey.
At our core, we are passionate about building technology that will change the world. From the early vision of Microsoft of placing a PC in every home and on every desk, to Nokia connecting billions of people through mobile devices, we have empowered generations. But we could not have achieved any of this without our fans around the world.
Your support has created strong momentum for Nokia Lumia smartphones and they continue to grow in popularity around the world. Last year alone, the awards, accolades and fan-generated rave reviews offered proof of the growing number of champions for our phones and tablets.
Whether you want to read more, capture more, watch more, listen more or get more done, Nokia mobile devices have been and are your go-to choice.
As Microsoft and Nokia Devices and Services come together as an expanded family, we will unify our passion, dedication and commitment to bringing you the best of what our joint technologies have to offer.
Together, we can connect and empower people with one experience for everything in their life in a world where it is mobile first and cloud first.
From today onwards, the possibilities are endless. As now, we’re one!
Originally announced back in September, Nokia’s devices and services business was valued at €3.79 billion ($5 billion) and Microsoft also said it would spend a further €1.65 billion ($2.2 billion) to license Nokia’s patents. The total deal was thus valued at €5.44 billion ($7.2 billion), to be paid in cash.
Yet that price is not the final one: “The estimate of the adjustments made for net working capital and cash earnings was slightly positive for Nokia, and we currently expect the total transaction price to be slightly higher than the earlier-announced transaction price of EUR 5.44 billion after the final adjustments are made based on the verified closing balance sheet.”
Microsoft and Nokia have also made a few adjustments to the scope of the assets originally planned to transfer:
- In India, Nokia’s manufacturing facility is subject to an asset freeze by the Indian tax authorities as a result of ongoing tax proceedings. Consequently, the facility remains part of Nokia following the closing of the transaction. Nokia and Microsoft have entered into a service agreement whereby Nokia would produce mobile devices for Microsoft.
- In Korea, Nokia and Microsoft agreed to exclude the Masan facility from the scope of the transaction. Nokia will now take steps to close the facility, which employs approximately 200 people.
As part of the transaction, Microsoft says it will honor all existing Nokia customer warranties for existing devices, starting today (April 25, 2014).
Top Image Credit: Volker Hartmann/Getty Images