Home Deals Microsoft's Nokia acquisition closes – the deal is done

Microsoft's Nokia acquisition closes – the deal is done

Microsoft's acquisition of Nokia’s phone business has finally closed. A new era begins for the company that once defined the computer industry. It hopes it will do so again.

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.

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

 

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