⚡ Get All Content for 20% Off ⚡

Microsoft Acquires Nokia's Device Business in Mega Deal Outgoing CEO Steve Ballmer agrees to pay $7.2 billion in cash for the Finnish tech company's smartphone business, associated patents and talent.

By Catherine Clifford

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Dawn.com

It's been a busy month for Microsoft.

A little over a week after announcing that CEO Steve Ballmer will retire, Microsoft inked a deal to buy Nokia's core smartphone business and associated patents for $7.2 billion cash.

The significant purchase by Microsoft represents the Redmond, Calif.-tech giant's efforts to become competitive in the mobile phone space, alongside names like Apple, Samsung and Google.

Related: Steve Ballmer to Retire as Microsoft CEO

The deal, announced in a joint statement from the two corporate boards today, includes 3.8 billion euros for the device portion of Nokia's business and another 1.65 billion euros for the related patents, totaling 5.44 billion euros, or $7.2 billion. The transaction is expected to be finalized in the first quarter of 2014, after regulatory approvals are complete.

Microsoft will also get 32,000 Nokia employees as part of the deal. "Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we anticipate a smooth transition and great execution," Microsoft's Ballmer said in a statement.

Related: Why All the Hate for Microsoft CEO Steve Ballmer?

Meanwhile, Microsoft itself will be losing one key employee – Ballmer himself. Just last week, Ballmer announced plans to retire at some point in the coming 12 months. Ballmer, 57, has been with Microsoft since 1980 and took the helm from Bill Gates in 2000. His critics say he failed to lead the tech giant to innovate fast enough and prevented it from being competitive in the mobile arena. The massive deal to takeover Nokia's mobile arm is likely to help Microsoft recover some lost ground in the second category.

With the deal announcement, Stephen Elop has stepped out of his role as CEO of Nokia and will become the vice president of devices and services for the Finnish tech-giant, fueling speculation that he may be in line for Ballmer's spot at the head of Microsoft. Elop is a former Microsoft executive, having the led the company's business division from 2008 to 2010.

As part of the deal with Nokia, Microsoft will own the Lumia brand, a smartphone that sold 7.4 million units in the second quarter of 2013. Also, Microsoft will take over the Nokia mobile phones business unit, which has hundreds of millions of customers across the globe, according to the joint statement.

Related: 6 Reasons Why Mark Hurd Should Be Microsoft's Next CEO

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Marketing

Ever Wonder Why Certain Websites Rank Higher Than Yours? This SEO Expert Reveals The Secret to Dominating Search Results

It's often the smart use of SEO, now supercharged with AI, particularly in keyword optimization.

Leadership

Former Interrogator Shares 5 Behaviors Liars Exhibit and How to Handle Them

Five deceptive behaviors to look for and how to respond to those behaviors when you encounter them.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.

Business Ideas

55 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.