It has finally happened! Microsoft has acquired the devices & services business of Nokia for $7.17 Bn in an all cash transaction.
Devices, Services As Well as License to Patents
As part of the deal, Microsoft will acquire substantially all of Nokia’s Devices & Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services production facilities, Devices & Services-related sales and marketing activities, and related support functions. The deal also involves a cross-licensing agreement wherein Microsoft gets non-exclusive license rights to Nokia’s patents with an option to extend the patent license to perpetuity.
Microsoft will also pay Nokia separately for licensing its HERE platform (mapping and location services)
A sweet deal for Microsoft
While the current deal is expected to be beneficial to Nokia shareholders one cannot overlook the fact that it is Microsoft who has the upper edge in the deal as far as the deal price is considered. To put it in perspective, Microsoft paid more to buy Skype than it did to acquire Nokia’s devices & services business which in contrast makes significantly more money than Skype ever did.
AllthingsD has a very exhaustive breakup of the Microsoft-Nokia deal.
This acquisition is expected to have far more implications than Microsoft’s entry into the hardware segment much like Google’s acquisition of Motorola mobility.
We will discuss some key implications and the repercussions of the deal later in the day but for now, it definitely is an end of era as Nokia gets engulfed into the brand that is Microsoft