Microsoft closes Nokia deal


One of the industry’s highest profile acquisitions in recent years is now complete after Microsoft announced that its acquisition of Nokia’s devices and services business has now been approved by shareholders and regulatory bodies around the world.

The Nokia unit will form part of the Microsoft Devices Group division, which also includes Microsoft’s Xbox hardware, Surface, Perceptive Pixel multitouch products and accessories. It will be headed up by former Nokia CEO Stephen Elop, who has been appointed executive vice president for the division. He will report directly to Microsoft CEO Satya Nadella.

“Today we welcome the Nokia Devices and Services business to our family. The mobile capabilities and assets they bring will advance our transformation,” said Nadella. “Together with our partners, we remain focused on delivering innovation more rapidly in our mobile-first, cloud-first world.”

Microsoft revealed that it intends to target the affordable mobile devices market with the Nokia mobile phone business – a division of Nokia that includes all handsets excluding the Lumia range. The software vendor claimed the market to deliver mobile services to the next billion people in the world offers a $50bn per year opportunity.

Jussi Nevanlinna , vice president for product marketing for Nokia Mobile Phones recently told that the affordable smartphone market is growing four times quicker than any other segment of the smartphone market.

“A lot of this growth is happening in growth economies where people are increasingly moving towards affordable smartphones. That is really the driver of the growth, and that is where Nokia is strong,” he said.

“We are the leading brand in these markets and people  know and recognise the brand and our brand preference is high. At the same time, our distribution cover in those markets is very wide. So that’s a really good starting position as a lot of this growth is coming from markets where we have strong distribution and a strong brand.”

Microsoft will also welcome approximately 25,000 employees transferring from Nokia. The firm added that due to the size and complexity of the deal, it has made adjustments to the deal during its closing. Microsoft will not acquire Nokia’s factory in Masan, South Korea, and its factory in Chennai, India will remain an asset of Nokia’s due to the tax reasons. Microsoft has also pledged to honour all existing Nokia customer warranties for existing devices, beginning April 25th 2014, as part of the transaction.