Microsoft acquires Nokia mobile business

Audacious £4.6 billion deal brings Microsoft one step closer to building its own handset range

Microsoft will acquire Nokia's Devices and Services business for €5.4 billion, both companies have revealed.

The deal feeds Microsoft's wider ambition to directly take on Apple, Google and Samsung in the "services and devices" division, with Nokia supplying patents, mapping services, and other numerous smartphone properties.


It also marks the end of a three-decade journey for Nokia - once a leading light in the mobile phones business that ultimately never caught up on the smartphone revolution sparked by Apple.

Microsoft is providing €1.5 billion of "immediate financing" to Nokia and will employ about 32,000 of its staff. The audacious acquisition also gives Microsoft ownership of the Lumia brand, while the Nokia chief executive Stephen Elop becomes VP of Devices and Services at Microsoft.

The move follows a two year partnership between Microsoft and Nokia resulting in a revamped Windows Phone business.

According to Microsoft CEO Steve Ballmer in a statement, Nokia Windows Phones "are the fastest-growing phones in the smartphone market" - yet they are estimated to hold less than three per cent of the market.

"This is a smart acquisition for Microsoft, and a good deal for both companies. We are receiving incredible talent, technology and IP. We've all seen the amazing work that Nokia and Microsoft have done together," Ballmer wrote in a message to employees.

"Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we expect a smooth transition and great execution."

In August, Ballmer announced he will retire as Microsoft CEO within the next 12 months, upon the appointment of a successor. Elop, who worked for Microsoft before heading up Nokia, has been tipped as a potential successor.