What Microsoft Has Bought for $7.17 Billion from Nokia?

Microsoft NOKIA dealIt is a breaking news that Microsoft has bought nokia for EUR 5.44 billion in cash. But many of us do not know what Microsoft has bought from Nokia for that price. Many are thinking that Microsoft has completely bought Nokia, but it only bought Nokia devices and services and its patents. It is like Nokia making devices for Microsoft.

Microsoft has an agreement with Nokia to own Nokia devices and their services for EUR 5.44 billion, in which EUR 3.79 billion relates to the purchase of all of the Devices & Services business, and EUR 1.65 billion relates to the mutual patent agreement and future option. Well, that means, Nokia will remain same, but only operating team officers will change between Microsoft and Nokia.

Approximately 32,000 people from Nokia are going to Microsoft from approximately 56,000 employed people of Nokia at the end of the second quarter 2013. And according to Nokia Press Release,

“Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current Mobile Phones products. Nokia will continue to own and maintain the Nokia brand.  Under the terms of the transaction, Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current and subsequently developed products based on the Series 30 and Series 40 operating systems.  Upon the closing of the transaction, Nokia would be restricted from licensing the Nokia brand for use in connection with mobile device sales for 30 months and from using the Nokia brand on Nokia’s own mobile devices until December 31, 2015.”

For better understanding, read Nokia Press Release completely even if you are not an investor of Nokia shares. Please share your thoughts and if you find any wrong in above article, please comment.


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