Microsoft to acquire Nokia's mobile business

In a $7.2 billion deal, Microsoft will buy substantially all of Nokia's Devices & Services business and license patents

Microsoft will acquire Nokia's Devices & Services business, which includes the smartphone and mobile phones businesses, for €3.79 billion ($5 billion), Microsoft said today.

The Redmond, Wash., software company will also pay €1.65 billion ($7.2 billion) to license Nokia's patents, for a total transaction cost of €5.44 billion in cash.

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Nokia CEO Stephen Elop will be coming back to Microsoft and lead an expanded devices team, Microsoft's CEO, Steve Ballmer, said in an email to employees. "Building on the partnership with Nokia announced in February 2011 and the increasing success of Nokia's Lumia smartphones, Microsoft aims to accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing," Microsoft said in a statement.

Nokia has been building smartphones around Microsoft's Windows Phone operating system in a bid to boost flagging market share, besides focusing on its Asha feature phones for emerging markets.

Microsoft will acquire Nokia's design team, manufacturing, and assembly facilities around the words, and operations, sales, marketing, and support teams, Ballmer wrote in his email to employees.

John Ribeiro covers outsourcing and general technology breaking news from India for the IDG News Service. Follow John on Twitter at @Johnribeiro. John's email address is john_ribeiro@idg.com.

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