Global computing giant Microsoft has acquired Nokia in a deal worth £4.613bn (5.44 billion Euros).
That includes 3.79 billion Euros (£3.2bn) for Nokia's Devices and Services business and a further 1.65 billion Euros (£1.4bn) to licence Nokia's patents.
Microsoft has been working alongside Nokia since February 2011, with the 147-year-old Finnish company using the firm's Windows Phone 7 and 8 operating systems in its devices. As a result Nokia has created its most successful smartphone in years with its Lumia range of devices. However, despite selling well, they have yet to live up to Nokia or Microsoft's sales expectations.
The new deal sees Stephen Elop return to lead the now much larger Devices team, while Julie Larson-Green – the woman in charge of the Xbox business – will continue to handle the launches of Xbox One and Surface, but will now also join Stephen's team to help him 'shape the organisation'.
There will also be a number of hires from Nokia joining the Microsoft team. Jo Harlow leads the Smart Devices team, Timo Toikkanen will lead the mobile phones team, Stefan Pannenbecker is in charge of design, while Juha Putkiranta will be in charge of the Microsoft/Nokia integration on the Nokia side (Tom Gibbons will handle this from the Microsoft side).
One of the most important parts of the deal is greeting a unified brand and advertising strategy, Microsoft says. And that will be the jobs of Tami Reller and Mark Penn.
Microsoft says it hopes the deal will allow it to grow its share and profit in the mobile sector, while it will provide Nokia with a stronger financial position.
"It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies," said Microsoft's out-going CEO Steve Ballmer.
"Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services.
“In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution.”
Ballmer added:“We are excited and honored to be bringing Nokia’s incredible people, technologies and assets into our Microsoft family. Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we anticipate a smooth transition and great execution.
"With ongoing share growth and the synergies across marketing, branding and advertising, we expect this acquisition to be accretive to our adjusted earnings per share starting in FY15, and we see significant long-term revenue and profit opportunities for our shareholders.”
Nokia chairman and now interim-CEO Risto Siilasman added:“For Nokia, this is an important moment of reinvention and from a position of financial strength, we can build our next chapter. After a thorough assessment of how to maximise shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders. Additionally, the deal offers future opportunities for many Nokia employees as part of a company with the strategy, financial resources and determination to succeed in the mobile space.”