Technology giant Microsoft is to buy Nokia’s mobile phone arm in a “bold step” in the smartphone market that will cost it about £4.6bn
The world’s biggest software company will buy the Nokia unit that makes mobile phones, including its line of Lumia smartphones that run Windows Phone software, as well as a 10-year licensing agreement to use Nokia’s patents.
The deal is expected to close in early 2014 and see 32,000 Nokia employees transfer to Microsoft.
Outgoing Microsoft boss Steve Ballmer, who announced plans to retire last month, said: “It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies.”
It is the latest mega deal in the telecoms sector after UK-based Vodafone confirmed the sale of its 45% stake in US group Verizon Wireless for 130bn US dollars (£84bn) – netting its investors a £54bn cash and shares windfall.
Finnish firm Nokia, once the world’s biggest mobile phone maker, will now become a telecoms equipment maker, representing a dramatic change in its near 150-year history.
For Microsoft, it marks an ambitious attempt to expand its share of the mobile devices market, having been slow to respond to demand and being overtaken by the likes of Samsung and Apple.
The group launched its Surface tablet last year, but take up has been muted, and it unveiled an overhaul in July to transform itself into a devices and services group.
Nokia and Microsoft first teamed up in February 2011 on the Lumia smartphones.