Microsoft Corporation and Nokia Corporation announced that the Boards of Directors for both companies have decided to enter into a transaction whereby Microsoft will purchase substantially all of Nokia’s Devices & Services business, license Nokia’s patents, and license and use Nokia’s mapping services.
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 assertive to earnings, strengthen its financial position, and provide a solid basis for future investment in its continuing businesses.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. Microsoft will draw upon its overseas cash resources to fund the transaction. The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia’s shareholders, regulatory approvals and other closing conditions.Last month, Nokia finalised the purchase of German engineering giant Siemens 50% stake in Nokia Siemens Networks for 1.7 billion Euros. NSN has posted stronger earnings than Nokia's mobile phone business.It posted a net profit of 8.0 million euros in the second quarter of this year, compared to Nokia's net loss of 227 million euros in the same period.
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