Microsoft’s US$7.2 billion acquired a bit more than half the total company. Its bit has been renamed Microsoft Mobile.
Microsoft Mobile is be headquartered in Espoo, outside of Helsinki, and remains a separate, though wholly owned, company. Stephen Elop, formerly the CEO of Nokia -- and before that an executive at Microsoft -- will lead the subsidiary, which will have more than 30,000 employees. Operationally it is part of Microsoft’s devices division, which also includes the Xbox, and which is also headed by Elop.
The transaction was meant to be finalised last month but was held up by regulation issues in various countries, including China, which has finally given the green light.
The deal was originally announced back in September, when previous Microsoft CEO Steve Ballmer was still in charge. At the time Microsoft said it would pay approximately US$5 billion for “substantially all” of Nokia's Devices and Services business and US$2.2 billion to license a broad portfolio of Nokia's patents.
Nokia is left with NSN (Nokia Solutions and Networks) and the mobile software business, including the HERE mapping technology. NSN was previously a 50:50 joint venture with Siemens, Nokia bought its partner out last year, mostly with money financed as a loan against the money it would get from the Microsoft deal. It seems likely that the remaining bits will be amalgamated and called simply ‘Nokia’.
“Today we welcome the Nokia Devices and Services business to our family. The mobile capabilities and assets they bring will advance our transformation,” said Microsoft CEO Satya Nadella. “Together with our partners, we remain focused on delivering innovation more rapidly in our mobile-first, cloud-first world.”
Nadella, only the third CEO in the company’s history, has set out a clear path for the new Microsoft. The Nokia acquisition was not his idea, but it is an important part of his vision.