Finland Times

Mobile phone giant Nokia Corporation on Tuesday decided to sell all of its phone sets, services and patent licences to software company Microsoft for EUR 5.44 billion.

Nokia expects to book a gain on sale of approximately EUR 3.2 billion, and expects the transaction to be significantly accretive to earnings, said a press release.

The transaction between the companies is expected to be completed in the first quarter of the next year after completion of approvals of the shareholders, regulatory approvals and other customary closing conditions.

 "After a thorough assessment of how to maximize shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders," the Chairman of the Nokia Board of Directors, Risto Siilasmaa said after finalising the decision.

According to the deal the Microsoft will acquire all of Nokia's devices, services businesses including the mobile phones and Smart devices business units as well as an industry-leading design team, operations including all Nokia devices and services production facilities, devices and services-related sales and marketing activities, and related support functions.

The closure of one of the biggest companies of the country might put adverse impact on the job market, although Nokia authority expected that about 32,000 people would be transferred to Microsoft including 4,700 in Finland.

Nokia's CTO (Chief Technology Office) organization and patent portfolio will remain within the Nokia Group. The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50%, of Nokia's net sales for the full year 2012.

Microsoft has agreed to a 10-year license arrangement with Nokia to use the Nokia brand on current mobile phones products.

"Today is an important moment of change and reinvention for Nokia and its employees," said Siilasmaa, adding that with the strong corporate identity, leading assets and talent, and from a position of renewed financial strength, they would build Nokia's next chapter.