Microsoft Corporation (NASDAQ:MSFT) to pay 5.44 Billion Euros for Acquiring Nokia Corporation (ADR) (NYSE:NOK) along with its Patents and Services


Cellular phone business of Nokia Corporation (ADR) (NYSE:NOK) along with its services and patents worth 5.44 billion Euros is being acquired by Microsoft Corporation (NASDAQ:MSFT) with the goal to give stiff competition to Apple Inc. (NASDAQ:APPL) and Google Inc (NASDAQ:GOOG). It was announced by Microsoft on Monday that this move will help Microsoft become an even more efficient and vast and transform from a company that previously made laptop and desktop operating systems and applications into a company that will offer services for almost all types of devices that are powered by the internet. The deal is expected to go through earlier next year.

Microsoft announced a couple of weeks ago that its current CEO Steve Ballmer is set to retire within these 12 months and the company is looking to get a new leader at the time of its Nokia acquisition. The Nokia deal has also given birth to the possibility that Stephon Elop, CEO Nokia might be Ballmer’s replacement. In addition to Elop, another 32,000 of the total of 99,000 Nokia employees will join Microsoft.

The total projected price for the Nokia unit is around $5 billion or 3.79 billion Euros; this price includes Nokia Lumia smartphones that are powered by Windows phone operating system. $2.2 billion or 1.65 billion Euros more will be paid to get a ten year long license that will allow Microsoft to use patents of Nokia Corporation (ADR) (NYSE:NOK); this deal also includes the option of extending this license indefinitely.

The Nokia acquisition is the second most expensive deal in Microsoft’s history of 38 years. Microsoft’s acquisition of Skype worth $8.5 billion is ranked the most costly deal in Microsoft’s history. Skype’s Tony Bates could also be a possible replacement of Ballmer as Microsoft’s CEO. Microsoft is going to take out $70 billion from its overseas account to purchase Nokia’s patents and smartphones. The details of the deal will be discussed in a conference that will be held on Tuesday in Finland.

Microsoft Corporation
Microsoft Corporation