Microsoft Purchases Nokia's Phone Division For $7.1 Billion

Microsoft and Nokia announced today that Nokia’s Devices & Services business; the part of the company that builds all Nokia’s phones (both smart and otherwise) is changing hands. 

Microsoft is paying €5.44 billion ($7.17 billion) for the struggling Nokia division. The deal, subject to shareholder and regulatory approval, is expected to close in the first quarter of 2014.

In the transaction, all of Nokia’s device business, including design, manufacturing, sales, marketing, and support, becomes a part of Microsoft. This includes 32,000 staff, of which 4,700 are in Finland.

Remaining behind is Nokia Solutions and Networks (formerly Nokia Siemens Networks), which builds telecommunications equipment, and mapping division. Nokia is also retaining its Advanced Technologies group, which develops and licenses intellectual property. These parts together, account for about half of Nokia’s revenue, and approximately 24,000 staff.

The headline €5.44 billion figure is split €3.79 billion ($4.99 billion) for Devices & Services, €1.65 billion ($2.17 billion) for a patent agreement. Under that agreement, Redmond is buying a ten year license to Nokia’s patents, with an option to make the ten year agreement perpetual. Microsoft is also acquiring Nokia’s various licenses to patents from Qualcomm, IBM, Motorola Mobility, and Motorola Solutions.