Nokia has announced that it is selling the majority of its handset business to Microsoft in a ($7.2 billion) EUR5.44 billion all-cash deal, while Stephen Elop has stepped down as Nokia’s chief executive officer (CEO).
Microsoft is paying just EUR3.8 billion for the handset division, and a single payment of EUR1.65 billion to licence Nokia’s patents for the next 10 years. Microsoft also gets a licence for Nokia’s mapping services.
The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50 per cent, of Nokia’s net sales for the full year 2012.
Nokia’s CEO Stephen Elop is stepping aside as Nokia President and CEO, but will stay in charge of the mobile phones as Nokia Executive Vice President of Devices & Services.
Following the purchase, Microsoft said that it aims to accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing.
On its part, Nokia plans to focus on its three established businesses: NSN, mapping and its patent portfolio.
“After a thorough assessment of how to maximize shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders,” said Risto Siilasmaa, Chairman of the Nokia Board of Directors and, following today’s announcement, also Nokia interim CEO.