Microsoft has acquired Nokia devices and services in a deal worth €3.79 billion (approximately $5 billion) along with an agreement to licence Nokia's patents for €1.65 billion ($2.17 billion), for a total of €5.44 billion in cash, the corporation announced today.
Approximately 32,000 Nokia employees are expected to transfer to Microsoft. The figure consists of 4,700 staff in Finland and 18,300 employees in the company's manufacturing, assembly and packaging departments worldwide. Microsoft has "no significant plans" to shift where work is done and expects Nokia departments "to stay largely in place, geographically."
Under the telecommunications acquisition, Stephen Elop, currently serving as Nokia's president and CEO, will rejoin Microsoft as Nokia executive vice president of an expanded Devices and Studios. Reporting to Microsoft CEO Steve Ballmer, the department will include Microsoft's current Devices and Studios work and will integrate "most of the teams coming over from Nokia."
"Building on our successful partnership, we can now bring together the best of Microsoft’s software engineering with the best of Nokia’s product engineering, award-winning design, and global sales, marketing and manufacturing," Elop said in a statement. "With this combination of talented people, we have the opportunity to accelerate the current momentum and cutting-edge innovation of both our smart devices and mobile phone products."
Julie Larson-Green, who is responsible for "studios experiences including all games, music, video and other entertainment," will continue to oversee the Xbox One launch and Surface enhancements as head of Devices and Studios Engineering Group. Devices and Studios replaced Microsoft's Interactive Entertainment Business as part of the company's internal structure in June. Larson-Green will join Elop's team once the acquisition finalizes to "work with him to shape the new organization."
"It's a bold step into the future — a win-win for employees, shareholders and consumers of both companies. 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," Ballmer said in a prepared statement. "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."
Late last month, Ballmer announced his plans to retire from his position within the next 12 months. Serving Microsoft since January 2000, Ballmer will remain as CEO until the corporation appoints a successor.
Terry Myerson will remain as head of the new Operating Systems Engineering Group, the department which oversees the development on the Xbox One's operating system, as well as the OS for mobile devices and all core cloud services. According to Ballmer, the working relationship already established between Myerson's team and Nokia through the partnership announced in February 2011 will "ensure that we do not disrupt our building momentum."