Nokia sells Devices & Services business to Microsoft

Big news overnight is the sale of Nokia's Devices & Services business to Microsoft. Although there has been talk of such of move for over two years now, especially with Windows Phone 8 and the Lumia brand being pretty much inseparable.

Nokia has announced that it has signed an agreement to sell its Devices & Services business and licence its patents to Microsoft for €5.44 billion in cash. The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia shareholders, regulatory approvals and other 'customary' closing conditions.

 Following the transaction, Nokia plans to focus on its three established businesses - NSN (network infrastructure and services), HERE (mapping and location services) and Advanced Technologies (technology development and licensing).

 '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,' said Risto Siilasmaa, Chairman of the Nokia Board of Directors and, following today's announcement, also Nokia interim CEO.

Microsoft has agreed to a 10-year license arrangement with Nokia to use the Nokia brand on current mobile phones products. Nokia will continue to own and maintain the Nokia brand though. Changes at the top too, with the previously-quoted Risto Siilasmaa stepping as as interim CEO, replacing  Stephen Elop. He will step aside to avoid any conflict of interest, but will become Executive Vice President, Devices & Services, working under Microsoft.

Details are still breaking on this and perhaps, how the company will carry on in practical terms ahead of the final deal. Nokia executives will hold an investor call at 3.00pm Finnish time today, which might clear things up.

Microsoft, inevitably, is very pleased about the acquisition, It's a bold step into the future - a win-win for employees, shareholders and consumers of both companies,' claimed Steve Ballmer, chief executive of Microsoft.

He's probably right too. Nokia becomes a more viable business, Microsoft gets a strong foothold in the mobile hardware market - an area where Microsoft has been pretty weak (compared to Google and Apple) for a number of years.

New hardware should still launch this year, but we're already speculating as to what will come next year after Microsoft gets that full control.

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