Microsoft, Nokia Deal to Close April 25

Microsoft announced on Monday that it will complete its $7.4 billion acquisition of Nokia's devices and services businesses on Friday, April 25, 2014, just days from now. The once mighty device maker will be rolled into Microsoft's corporate hierarchy and will continue as a semi-autonomous affiliate called Microsoft Mobile.

"We have completed the steps necessary to finalize Microsoft's acquisition of the Nokia Devices and Services business," Microsoft general counsel Brad Smith wrote in a post to The Official Microsoft Blog. "The transaction will be completed this Friday, April 25, when we'll officially welcome the Nokia Devices and Services business as part of the Microsoft family."

Microsoft announced the blockbuster deal to acquire the most important parts of Nokia in early September 2013 and said at the time that it expected to close the books on this acquisition by the end of the first quarter of 2014. In the months that followed, Nokia's shareholders approved the deal, as did the world's most important regulatory bodies, including the US Department of Justice and the EU's European Commission.

However, antitrust regulators in China, prodded by competitors such as Samsung and various China-based handset makers, wrangled for a better deal, delaying the process. So in March, Microsoft revealed that it would need until the end of April to complete the acquisition. In early April, China finally did approve the purchase, having been assured that Microsoft would afford competitors in that country the same reasonable patent licensing terms it provides to companies in other countries. Over the past few weeks, Microsoft has begun contacting Nokia's partners, suppliers and customers to explain the coming changes.

Somewhat separate from the transaction, former Nokia CEO Stephen Elop will become vice president of Microsoft's Devices & Services business unit. So he will in effect continue running Nokia's devices and services businesses, along with other related Microsoft products like Surface and Xbox.

Microsoft's close ties to Nokia date back to early 2011, when the handset maker entered into a strategic partnership with Microsoft for the Windows Phone OS and its associated global mobile ecosystem. Under the terms of that agreement, Nokia agreed to focus its smartphone efforts on Windows Phone.

The results were at turns triumphant and disastrous for Nokia: On the one hand, Nokia now dominates the Windows Phone market, and is responsible for over 90 percent of all Windows Phone handset sales, thanks to its award-winning hardware and comprehensive apps and online services. But on the other, Nokia has continued losing market share throughout this transition and its smartphones efforts are not profitable. Ultimately, Microsoft's purchase of Nokia was more out of necessity than desire.

"This acquisition will help Microsoft accelerate innovation and market adoption for Windows Phones," Mr. Smith notes. "In addition, we look forward to introducing the next billion customers to Microsoft services via Nokia mobile phones."

As part of this week's announcement, Microsoft has also revealed a handful of changes to the original agreement. Microsoft will now manage the nokia.com domain and social media sites for up to a year, will hire 21 China-based Nokia employees and will no longer acquire a Nokia manufacturing facility in Korea. "We look forward to the journey ahead," Smith concludes.