The software giant Microsoft reached a deal with Nokia on Tuesday, acquiring the phone company for €5.44 billion. 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.
“This agreement is really a bold step into the future for Microsoft,” Steve Ballmer said in a telephone interview from Finland. “We’re excited about the talent capabilities it will bring to Microsoft.”
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.
Microsoft hopes that acquiring Nokia will help the company catch up in the mobile world, which has been dominated by Apple and Android devices since the smartphone was first introduced.