Redmond, Wash. – Microsoft completed its acquisition of substantially all of Nokia’s devices and services business to build up Windows Phone smartphone share, target the affordable mobile devices market, and advance Microsoft’s transformation, said Microsoft CEO Satya Nadella.
“The mobile capabilities and assets they bring will advance our transformation,” said Nadella, adding the company will “remain focused on delivering innovation more rapidly in our mobile-first, Cloud-first world.”
In targeting affordable mobile devices, Microsoft said it wants to deliver “the first mobile experience to the next billion people while introducing Microsoft services to new customers around the world.”
Nokia’s devices business has been renamed Microsoft Mobile Oy with its headquarters in Finland. It will be operated as an indirectly wholly owned subsidiary of Microsoft, Nokia said.
With the acquisition, former Nokia president/CEO Stephen Elop becomes executive VP of the Microsoft devices group, overseeing Nokia’s Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Microsoft’s Surface tablet, Perceptive Pixel products and accessories.
About 25,000 Nokia employees become Microsoft employees. The employee count excludes a factory in Masan, South Korea, and the factory in Chennai, India, that were originally part of the deal.
Nokia and Microsoft agreed to close the Korean factory, which employs about 200 people. The India factory was stricken from the deal because of an asset freeze by Indian tax authorities resulting from a tax dispute. That facility will remains with Nokia and but will produce mobile devices for Microsoft.
Microsoft announced the deal last September to but Nokia’s device and services business for 5.44 billion euros ($7.53 billion) in cash to “accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing,” Microsoft’s then-CEO Steve Ballmer said at the time.
Since 2011, Nokia and Microsoft had been joined in a strategic partnership to promote Microsoft’s smartphone OS and help Nokia rebuild its cellphone market share.