Computer giant Microsoft is preparing to take over mobile phone company Nokia for €5.4 billion, announced the Finnish firm in a statement released earlier this week (September 3). The purchase, which should be completed next year, also includes the sale of important licences owned by the phone manufacturer, which was a leader in the mobile phone segment in past years.
As part of the deal, the American company will also control Devices & Services, a Nokia subsidiary with 32,000 workers. With an annual business volume of €14.9 billion, the unit accounted for nearly half of Nokia’s total sales last year.
The sale will also see the return of Nokia’s current president and CEO, Stephen Elop, to Microsoft, where he worked until 2010. The timing of the shift couldn’t be more fitting, as Microsoft is looking for a replacement for its current leader, Steve Ballmer, who announced last week that he will leave his position sometime in the next 12 months.
In its press release, Nokia revealed that the Finnish company will be focusing on stable businesses, such as HERE, a leading tracking service developed by the firm for more than a decade.
“This is a moment of change and reivention for Nokia and its workers,” said Nokia’s president of the board, Risto Siilasmaa.
Once a market leader in the mobile phone business, Nokia was overtaken by companies such as Samsung and Apple in the smartphone segment. Despite selling €53.7 million of mobile equipment in the second quarter of 2013, the company’s losses reached the €5 billion mark. Since 2010 and under Elop’s guidance, the Finnish company fired around 20,000 workers.