Microsoft has acquired Nokia Devices & Services

Forums › Legacy mobile platforms (Windows Mobile, Palm OS, Web OS, Symbian, Meego, Blackberry) › Microsoft has acquired Nokia Devices & Services

billgates

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#129091 3-Sep-2013 15:14

One of the most enticing "what-ifs" of recent years has come true: Microsoft has purchased Nokia's Devices and Services unit, it announced today. It unites Windows Phone 8 with its biggest hardware supporter, and gives the company an integrated solution across hardware and software. Microsoft paid 3.79 billion Euros for Nokia's business, plus another 1.65 billion Euros for
its portfolio of patents. The purchase comes on the heelsof what appeared to be a failed purchase in June, though at that point it seemed as if conversations had broken off entirely. Now the two come
together, in what outgoing Microsoft CEO called "a bold step into the future."

http://www.theverge.com/2013/9/2/4688530/microsoft-buys-nokias-devices-and-services-unit-unites-windows-phone

Good move. Nokia has their business well established in a lot of countries. The patents have also been licensed.

Do whatever you want to do man.

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#889032 3-Sep-2013 15:17

2 dead ducks joining together to make one, how nice

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#889033 3-Sep-2013 15:17

Press release. Note the leadership changes at bottom:

Nokia Corporation
Stock Exchange Release
September 3, 2013 at 06.00 (CET +1)

REDMOND, Washington and ESPOO, Finland - 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.

TERMS OF THE AGREEMENT

Under the terms of the agreement, Microsoft will acquire substantially all of Nokia's Devices and Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services-related production facilities, Devices & Services-related sales and marketing activities, and related support functions. At closing, approximately 32,000 people are expected to transfer to Microsoft, including 4,700 people in Finland and 18,300 employees directly involved in manufacturing, assembly and packaging of products worldwide. The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50 percent of Nokia's net sales for the full year 2012.

Microsoft is acquiring Nokia's Smart Devices business unit, including the Lumia brand and products. Lumia handsets have won numerous awards and have grown in sales in each of the last three quarters, with sales reaching 7.4 million units in the second quarter of 2013.

As part of the transaction, Nokia is assigning to Microsoft its long-term patent licensing agreement with Qualcomm, as well as other licensing agreements.

Microsoft is also acquiring Nokia's Mobile Phones business unit, which serves hundreds of millions of customers worldwide, and had sales of 53.7 million units in the second quarter of 2013. Microsoft will acquire the Asha brand and will license the Nokia brand for use with current Nokia mobile phone products. Nokia will continue to own and manage the Nokia brand. This element provides Microsoft with the opportunity to extend its service offerings to a far wider group around the world while allowing Nokia's mobile phones to serve as an on-ramp to Windows Phone.

Nokia will retain its patent portfolio and will grant Microsoft a 10-year non-exclusive license to its patents at the time of the closing. Microsoft will grant Nokia reciprocal rights to use Microsoft patents in its HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement in perpetuity.

In addition, Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four-year license.

Microsoft will also immediately make available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible notes that Microsoft would fund from overseas resources. If Nokia decides to draw down on this financing option, Nokia would pay back these notes to Microsoft from the proceeds of the deal upon closing. The financing is not conditional on the transaction closing.

Microsoft also announced that it has selected Finland as the home for a new data center that will serve Microsoft consumers in Europe. The company said it would invest more than a quarter-billion dollars in capital and operation of the new data center over the next few years, with the potential for further expansion over time.

NOKIA LEADERSHIP CHANGES

Nokia expects that Stephen Elop, Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber would transfer to Microsoft at the anticipated closing of the transaction. Nokia has outlined these changes in more detail in a separate release issued today.

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#889034 3-Sep-2013 15:18

This might pave a new road for Stephen Elop to get to Microsoft CEO-role.

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#889037 3-Sep-2013 15:21

More than a tablet, Microsoft should have started mobile with this move. Stephen Elop will jump the queue for next CEO.

wasabi2k

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#889039 3-Sep-2013 15:22

Dang, that's a lot of cash.

Cautiously optimistic.

Also Microsoft as a dead duck? please.

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#889040 3-Sep-2013 15:22

And as always, write off such things as pointless at your peril.... I still remember reading the Business Week article in 1993 about the 'Fall of an American icon' (Apple)... and yes business is hard and these mergers are always hard to make effective, Microsoft still dominates the corporate world and the desktops of many personal computers. This act is not over....

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#889051 3-Sep-2013 15:29

Nokias lifecycle as a company was coming to an end , so something had to happen. A lot of its value is possibly patents, although I wonder how some of those software patents would now apply in NZ due to the recent changes.

Microsofts business model is also changing a lot. It's cash cows, windows and office software on PCs are also slowly coming to an end, so they are now moving into cloud based services. IBM also had to change when their lifecycle changed,, and they went from hardware to software and services. I wonder how long apple have got left with their current model, especially as they now only seem to be releasing mobile type products once a year and all at one time, and they are not exactly revolutionary anymore compared to the competition.

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#889053 3-Sep-2013 15:32

wasabi2k: Dang, that's a lot of cash.

That's nothing compared to Verizon paying US$130 billion to buy out Vodafone's 45% on Verizon Wireless.

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#889059 3-Sep-2013 15:38

freitasm:
wasabi2k: Dang, that's a lot of cash.

That's nothing compared to Verizon paying US$130 billion to buy out Vodafone's 45% on Verizon Wireless.

Absolute bargain to get back boardroom control.... they do turn over $115bn a year as well..... no more dividends for VF...

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#889062 3-Sep-2013 15:42

From Ballmer to employees:

From: Steve Ballmer
To: MS FTEs
Date: Sep. 2, 8:00 PM PDT (Sep. 3, 6:00 AM EET)
Subject: Accelerating Growth

We announced some exciting news today: We have entered into an agreement to purchase Nokia’s Devices & Services business, which includes their smartphone and mobile phone businesses, their award-winning design team, manufacturing and assembly facilities around the world, and teams devoted to operations, sales, marketing and support.

For Microsoft, this is a bold step into the future and the next big phase of the transformation we announced on July 11.

We are very excited about the proposal to bring the best mobile device efforts of Microsoft and Nokia together. Our Windows Phone partnership over the past two and half years has yielded incredible work - the stunning Lumia 1020 is a great example. Our partnership has also yielded incredible growth. In fact, Nokia Windows Phones are the fastest-growing phones in the smartphone market.

Now is the time to build on this momentum and accelerate our share and profits in phones. Clearly, greater success with phones will strengthen the overall opportunity for us and our partners to deliver on our strategy to create a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.

We have laid out Microsoft’s strategic rationale for this transaction in a presentation that I encourage you to read.

This is a smart acquisition for Microsoft, and a good deal for both companies. We are receiving incredible talent, technology and IP. We’ve all seen the amazing work that Nokia and Microsoft have done together.

Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we expect a smooth transition and great execution.

As is always the case with an acquisition, the first priority is to keep driving through close, which we expect in the first quarter of 2014, following approval by Nokia’s shareholders, regulatory approvals, and other closing conditions.

But I also know people will have some questions about what happens post-close. While details aren’t final, here is what we know, and how we’re generally approaching integration:

While today’s announcement is big news, we have to stay heavily focused on running the current business. We have a huge fall and holiday season ahead of us, so we need to execute flawlessly and continue to drive our business forward. I have no doubt we will.

Steve

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#889066 3-Sep-2013 15:47

Open letter from Steve Ballmer and Steven Elop:

Nokia and Microsoft have always dreamed big – we dreamed of putting a computer on every desk, and a mobile phone in every pocket, and we’ve come a long way toward realizing those dreams.

Today marks a moment of reinvention.

Nokia has an identity spanning 150 years of heritage, innovation, excellence, and change which began and will continue in Finland and around the world. From humble beginnings as a paper mill factory, to manufacturing rubber boots and car tires, and then to mobile phones, reinvention is in Nokia’s blood.

Nokia will now write its next chapter, focused on enabling mobility through its leadership in networking, mapping & location, and advanced technologies.

For Microsoft as well, today is a bold step into the future, a huge leap forward on our journey of creating a family of devices and services that delight people and empower businesses of all sizes.

Our partnership over the past two and a half years, which combined our respective strengths to build a new global mobile ecosystem, has created incredible results: award-winning phones and amazing services that have made Nokia Windows Phones the fastest-growing smartphones in the world.

Building on this successful partnership, we announced some important news today: an agreement for Microsoft to purchase Nokia’s Devices & Services business, to deliver more choices, faster innovation, and even more exciting devices and services to our customers.

Today’s agreement will accelerate the momentum of Nokia’s devices and services, bringing the world’s most innovative smartphones to more people, while continuing to connect the next billion people with Nokia’s mobile phone portfolio.

With the commitment and resources of Microsoft to take Nokia’s devices and services forward, we can now realize the full potential of the Windows ecosystem, providing the most compelling experiences for people at home, at work and everywhere in between.

We will continue to build the mobile phones you’ve come to love, while investing in the future – new phones and services that combine the best of Microsoft and the best of Nokia.

Nokia and Microsoft are committed to the next chapter.

Together, we will redefine the boundaries of mobility.

Steve & Stephen

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#889069 3-Sep-2013 15:49

I think Microsoft should buy BlackBerry while they are going cheap.

Heaps of intellectual property up for grabs that could help Microsoft get Windows Phone positioned into the corporate market.

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#889070 3-Sep-2013 15:51

ajobbins: I think Microsoft should buy BlackBerry while they are going cheap.

Heaps of intellectual property up for grabs that could help Microsoft get Windows Phone positioned into the corporate market.

Very interesting idea.

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#889073 3-Sep-2013 15:58

I wonder if the next step of my prediction made here will transpire..

http://www.geekzone.co.nz/forums.asp?forumid=86&topicid=128811&page_no=1#884098

semigeek

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#889074 3-Sep-2013 15:58

ajobbins: I think Microsoft should buy BlackBerry while they are going cheap.

Heaps of intellectual property up for grabs that could help Microsoft get Windows Phone positioned into the corporate market.

My partners place of work has dumped Blackberry, they are now switching to Windows Phone.

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