Microsoft Completes Acquisition Of Nokia Devices And Services Business

(RTTNews) - Software giant Microsoft Corp. (MSFT) announced Friday the completion of the acquisition of substantially all of the devices & services business of handset maker Nokia Corp. (NOK). The deal was agreed upon on September 3, 2013, and was originally expected to close in the first quarter of 2014.

"Today we welcome the Nokia Devices and Services business to our family. The mobile capabilities and assets they bring will advance our transformation. Together with our partners, we remain focused on delivering innovation more rapidly in our mobile-first, cloud-first world," Microsoft CEO Satya Nadella said in a statement.

Redmond, Washington-based Microsoft, the world's largest software maker, agreed in early September 2013 to buy the handset unit of Nokia in a deal valued at 5.44 billion euros, or $7.18 billion, in cash.

Under the terms of the agreement, the software giant is paying 3.79 billion euros to buy substantially all of Nokia's Devices & Services business, and 1.65 billion euros to license Nokia's patents.

The deal includes the mobile phones and smart devices business units as well as the design team of Nokia. Operations including related production facilities, sales and marketing activities, and support functions will also be bought.

However, Microsoft said it is not acquiring the Masan, South Korea-based factory, and the Chennai, India-based factory. These will remain with Nokia due to the tax liens on Nokia's assets in India that prevent transfer. These adjustments were made while closing the deal, as is done with any multinational agreement of this size, scale and complexity.

Microsoft said the Nokia mobile phone business will enable it to target the $50 billion annual market for affordable mobile devices. The deal will also help Microsoft accelerate innovation and market adoption for Windows Phones, as well as help introduce the next billion global customers to Microsoft services via Nokia mobile phones.

Nokia had said on Monday that the deal is now "subject only to certain customary closing conditions." Microsoft noted that the acquisition has now been approved by Nokia shareholders and by governmental regulatory agencies around the world.

The deal received regulatory approval from the Ministry of Commerce of the People's Republic of China on April 8. Earlier, it received regulatory approvals from the European Commission, the U.S. Department of Justice and numerous other jurisdiction.

The regulatory approval process has involved a thorough review of Nokia's patent licensing practices by several competition authorities around the world.

The former Nokia President and CEO Stephen Elop will serve as executive vice president of the Microsoft Devices Group, and will report directly to Nadella.

Elop will now be responsible for the expanded devices business, which includes Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Surface, Perceptive Pixel (PPI) products, and accessories.

Microsoft confirmed that it will honor all existing Nokia customer warranties for existing devices, beginning today.

In Friday's regular trading session, MSFT is currently trading at $40.30, up $0.44 or 1.10% on a volume of 10.92 million shares, and NOK is trading at $7.32, up $0.02 or 0.27% on a volume of 3.15 million shares.