Microsoft has said that it has reached an agreement to acquire the handset and services business of Nokia for about $7.2 billion. As per the deal, 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. The transaction will close by 2014 Q1, subject to approval by Nokia’s shareholders & regulatory approvals. Nokia will continue to make network equipments & holder of patents. 32,000 Nokia employees will join Microsoft.
Stephen Elop, Nokia’s boss, is a possible contender for the post of Microsoft head. Nokia has been strong competition from Apple & Samsung, which have become the top smartphone makers. Nokia which had a 40% market share in the handset business during its glorious days, has seen its market share plummet in the recent years. Microsoft had earlier bought Skype. As part of the deal, Microsoft will have the Lumia brand & its products. Lumia has won several awards & has become the flagship product of Nokia.