Microsoft Corp. has struck a $7 billion deal to acquire Nokia Corp.’s core cellphone business, this is largely seen as a bold move to try to catch up in a fast-growing global mobile business that is now dominated by Samsung and Apple at the global level and Micromax etc at the Indian level.
This deal comes close on the heels of announcing the planned retirement of Microsoft old timer, Steve Ballmer. As part of the deal for the devices-and-services business, Microsoft will bring aboard several executives who could be contenders for Ballmer’s job.
The global companies said on Monday that Microsoft will pay €3.79 billion to buy “substantially all” of the Nokia business, which includes its smartphone operations. The Redmond, Wash., company will also pay €1.65 billion to license Nokia’s patents, the companies said, bringing the deal to €5.44 billion, or $7.18 billion.
It becomes important to note that Stephen Elop, Nokia’s CEO, and several other executives are joining Microsoft as part of the deal. Elop, a former Microsoft executive, is among the names being circulated as Ballmer’s successor. Microsoft recently announced that Ballmer will retire from his post within a year, or when the next CEO is chosen.
Microsoft is also expected to use its stockpile of overseas cash to pay for the Nokia purchase and licensing pact. Microsoft and Nokia said the transaction is expected to close in the first three months of 2014, subject to approval by Nokia shareholders and other conditions.