Photograph by Jin Lee/Bloomberg
Microsoft late Monday announced it is buying Nokia's smartphone and cellular handset business in a deal worth $7.2 billion.
The deal sent Finnish firm Nokia's Helsinki-listed shares zooming 31% in afternoon trading Tuesday and earlier were up close to 50%, a move reported by Bloomberg as a record advance. Microsoft shares were down about 5%.
As part of the deal, Microsoft will own the company
which has been a leader in creating the Lumia line of smartphones that
run Microsoft's Windows Phone operating system. Microsoft is paying $5
billion to buy Nokia's Devices & Services unit and an additional
$2.2 billion to license Nokia's patents.
The deal formally puts the two companies together after collaborating
closely since Feb. 2011 to create handsets that compete with those from
Apple and Samsung. The companies have made in-roads in many parts of
the world, including Europe, but are still facing headwinds in the U.S.
Windows Phone has already surpassed BlackBerry as the third largest
smartphone platform according to some analysts.
PRESS RELEASE: Text of Microsoft's news release about the deal
LETTER FROM BALLMER, ELOP: Text of blog post from execs
The
move is one of the boldest yet by CEO Steve Ballmer, who stated last
month he plans to retire in 12 months. By buying Nokia's handset
business, Microsoft is showing it's committed to turning itself into
more of a devices company than a software company. The deal's total
value makes it the second largest ever done by Microsoft, just behind
the $9.3 billion buy of Internet phone service Skype in May 2011, says
S&P Capital IQ.
"Nokia and Microsoft have always dreamed big," said Ballmer and Nokia chief Stephen Elop in an "open letter" blog post.
"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."
Elop, a former
Microsoft executive who took the helm of Nokia, will become Nokia
Executive Vice President of Devices & Services.
The deal is expected to close in the first quarter of 2014 subject to shareholder and regulatory approval.
Source: Usatoday
0 comments: