All your base are belong to us: Nokia is now Microsoft
The deal has been sealed, and so Nokia's whole Devices & Services division is now officially part of Microsoft. Almost, that is, because some recent "adjustments" to the deal left Nokia's Chennai (India) and Masan (South Korea) factories out of its scope.
The initially announced transaction price for the acquisition of Nokia's Devices & Services division was about $7.2 billion, but in its just-published statement, the company informs that it expects the final price to be slightly higher, due to a positive estimate of Nokia's net working capital and cash earnings. Unofficial estimations quote a total price of about $7.5 billion.
It's still somewhat unclear exactly what the future of Nokia and its smartphones is going to be at this point, but hopefully we'll know more soon, as it's been announced that more details surrounding the closing of the deal are to be disclosed on April 29, when we're also going to learn about the company's first quarter 2014 financial results. Expectations are that Nokia will continue building Windows Phone smartphones for Microsoft, but it's uncertain under what brand those smartphones are going to be released. A leaked memo has recently revealed that the part of Nokia that's getting acquired by Microsoft will be renamed to Microsoft Mobile, but neither Nokia, nor Microsoft have provided confirmation yet.
As a direct result of these latest developments, top Nokia executives Stephen Elop, Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber are currently on their way to the life-boats scattered around the burning platform, getting ready to join Microsoft's ranks. Once he returns to Microsoft, ex-CEO Stephen Elop is going to become chief of Redmond's Xbox and tablets businesses.
Stock exchange release
April 25, 2014 at 13.55 (CET +1)
Espoo, Finland - Nokia today announced that it has completed the sale of substantially all of its Devices & Services business to Microsoft.
The transaction, which also includes an agreement to license patents to Microsoft, was originally announced on September 3, 2013.
As earlier communicated, the transaction was subject to potential purchase price adjustments. The estimate of the adjustments made for net working capital and cash earnings was slightly positive for Nokia, and we currently expect the total transaction price to be slightly higher than the earlier-announced transaction price of EUR 5.44 billion after the final adjustments are made based on the verified closing balance sheet.
Additionally, as is customary for transactions of this size, scale and complexity, Nokia and Microsoft made certain adjustments to the scope of the assets originally planned to transfer. These adjustments included Nokia's manufacturing facilities in Chennai in India and Masan in the Republic of Korea not transferring to Microsoft. These adjustments have no impact on the material deal terms of the transaction and Nokia will be materially compensated for any retained liabilities.
In India, our manufacturing facility is subject to an asset freeze by the Indian tax authorities as a result of ongoing tax proceedings. Consequently, the facility remains part of Nokia following the closing of the transaction. Nokia and Microsoft have entered into a service agreement whereby Nokia would produce mobile devices for Microsoft.
In Korea, Nokia and Microsoft agreed to exclude the Masan facility from the scope of the transaction. Nokia will now take steps to close the facility, which employs approximately 200 people.
Amid the uncertainty for our employees in Chennai and because of the planned closure of our facility in Masan, Nokia plans to offer a program of support, including financial assistance which would give our employees the chance to explore opportunities outside Nokia starting from a sound financial base. The company plans to bring to Chennai and Masan elements of its Bridge program, which we have made available for employees affected by company changes in other sites.
The convertible bonds issued by Nokia to Microsoft following the announcement of the transaction have been redeemed and netted against the deal proceeds by the amount of principal and accrued interest.
As previously announced, the following Nokia leaders have stepped down from the Nokia Leadership Team and transferred to Microsoft at closing, effective April 25, 2014: Stephen Elop, Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber. Until further notice, Nokia's interim governance model announced on September 3, 2013 is in place.
Nokia plans to cover in further detail aspects of the closing of the transaction in conjunction with its first quarter 2014 results announcement on April 29, 2014.
Now that the closing of this transaction has taken place, Nokia is arranging a Board of Directors meeting for early next week in relation to its strategy assessment which was originally disclosed on September 3, 2013.
It should be noted that Nokia and its business are exposed to various risks and uncertainties and certain statements herein that are not historical facts are forward-looking statements, including, without limitation, those regarding: A) purchase price adjustments related to the sale by Nokia of substantially all of Nokia's Devices & Services business, including Smart Devices and Mobile Phones (referred to below as "Sale of the D&S Business") pursuant to the Stock and Asset Purchase Agreement, dated as of September 2, 2013, between Nokia and Microsoft International Holdings B.V.; B) expectations with respect to production facilities; C) expectations, plans or benefits related to or caused by the Sale of the D&S Business; D) expectations, plans or benefits related to Nokia's strategies, including plans for Nokia with respect to its continuing businesses that were not be divested in connection with the Sale of the D&S Business; E) expectations, plans or benefits related to changes in leadership and operational structure; F) expectations and targets regarding our operational priorities, financial performance or position, results of operations and use of proceeds from the Sale of the D&S Business; and G) statements preceded by "believe," "expect," "anticipate," "foresee," "sees," "target," "estimate," "designed," "aim", "plans," "intends," "focus," "will" or similar expressions. These statements are based on management's best assumptions and beliefs in light of the information currently available to it. Because they involve risks and uncertainties, actual results may differ materially from the results that we currently expect. Factors, including risks and uncertainties that could cause these differences include, but are not limited to: 1) our ability to effectively and smoothly implement planned changes to our leadership and operational structure or maintain an efficient interim governance structure and preserve or hire key personnel; 2) any negative effect from the implementation of the Sale of the D&S Business, including our internal reorganization in connection therewith; 3) disruption and dissatisfaction among employees caused by the Sale of the D&S Business; 4) the amount of the costs, fees, expenses and charges related to or triggered by the Sale of the D&S Business; 5) any impairments or charges to carrying values of assets or liabilities related to or triggered by the Sale of the D&S Business; 6) potential adverse effects on our business, properties or operations caused by us implementing the Sale of the D&S Business; 7) the initiation or outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted against us relating to the Sale of the D&S Business, as well as the risk factors specified on pages 12-47 of Nokia's annual report on Form 20-F for the year ended December 31, 2012 under Item 3D. "Risk Factors." and risks outlined in our fourth quarter and full year 2013 results report available for instance at www.nokia.com/financials. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Nokia does not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
Nokia is a technology leader with three strong businesses: NSN, which offers network infrastructure; HERE, which offers location-based services; and Advanced Technologies, which is focused on advanced technology development and licensing. http://company.nokia.com
1. sgodsell (Posts: 1040; Member since: 16 Mar 2013)
Bye bye Nokia. You were good until you sold yourself to the devil.
4. ShenAlJoker (Posts: 86; Member since: 19 Jul 2013)
The known devil is better than the unknown!!!!!!!!!
17. nokia12 (Posts: 302; Member since: 19 Nov 2013)
so happy that Mr.flop is finally out of Nokia..
2016 we are waiting for you.. common Nokia ..
its time to build again..
82. express77 (unregistered)
But RIP Microsoft's Xbox and Tablet division.
84. NexusKoolaid (Posts: 286; Member since: 24 Oct 2011)
Bah - known or unknown the end result is the same.
28. Pedro0x (Posts: 271; Member since: 19 Oct 2012)
So those of us that don't like WP can't voice our opinions, well that is cool.
33. papss (unregistered)
No it's that you fandroids say it over and over and frankly only fandroids think android is the all mighty savior... It's not
44. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
The Elop hate isnt just from fandroids.....its also from folks that actually used Meego. And some long time Nokia users.
52. panjgoori (Posts: 20; Member since: 17 Nov 2012)
well if Android was not the savior neither was WP. MeeGo was the savior but Elop killed it.
57. papss (unregistered)
No Nokia killed it.. the board killed it
70. droid_does_more (banned) (Posts: 29; Member since: 25 Jan 2010)
No. Elop killed Meego. Not the board. Elop removed any and all threats against WP sales, menial as they are.
73. NokiaFTW (limited) (Posts: 1900; Member since: 24 Oct 2012)
You know what Meego was? It was Android i.e. Buggy, laggy and unsecure sans the apps. It was best to eradicate such a OS and use a fresh, smooth and much better OS on awesome hardware Nokia had.
75. droid_does_more (banned) (Posts: 29; Member since: 25 Jan 2010)
Better? That's subjective.
Laggy? Have you ever used Meego? Used an actual N9? Because if you did, you'd know Meego was far from laggy or buggy. It was hailed in the media as the next big OS. It had QT compatibility. Meego was far from laggy dude. Try again on someone who hasn't extensively used the N9.
71. NokiaFTW (limited) (Posts: 1900; Member since: 24 Oct 2012)
HTC is the best example for how Android isn't the "saviour" OS these trolls are deeming it to be. Yet they still hate on WP & Nokia.
76. droid_does_more (banned) (Posts: 29; Member since: 25 Jan 2010)
I've never hailed Android as being the savior of anything dude. But is far better than WP.
And why is it that WPhanboys always say Android is laggy? Android hasn't lagged since ICS and Jelly bean. Try again.
78. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
And how are those amazing HTC WP sales doing these days..
Sometimes...it isnt the OS...but the manufacture.... or the hardware....or marketing....or sometimes....others just do it all better.
What OS do you think smaller companies will flock to....one with a small market share...or one that has alot more exposure....
Nokia gambled and won....I dont think too many other companies can afford to gamble like that.
34. PressStart (Posts: 113; Member since: 08 Apr 2014)
Opinions ok, but can anyone really know the future of WP? How does he know it was a bad move for Nokia? Only time (and sales) will tell.
48. corporateJP (Posts: 1548; Member since: 28 Nov 2009)
Numbers support it was a bad move for Nokia. The company lost more money under Elop and became devalued horribly. Marketshare was destroyed by Windows Phone adoption.
The unknowns remain: should they have improved Symbian and continued running with it? Kept pushing Meego as a replacement? Adopted Android as well or as a full replacement? Any of this is pure speculation, but Elop at the helm pushing Windows Phone and trashing everything else Nokia did and made surely put the nail in the coffin.
I use all three major OSes right now, but I will tell you, after my Nokia phone dies, I won't be picking up a Microsoft phone. Bank on that.
74. NokiaFTW (limited) (Posts: 1900; Member since: 24 Oct 2012)
And why exactly this hatred towards to Microsoft? Just cuz they have a monopoly in the PC market? Its not their fault if another company cannot provide a good working alternative to Windows in the PC market. MacBooks are overpriced everywhere. Or is the hate cuz of the money they charge? Let me tell you, Apple is even more greedy than MS.
79. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
Correction....its not that others cant provide a good working alternative...because in many cases there are....OS X and many Linux distros.
Remember..you said good working.....not better working. And even better working is opinion. Linux was doing Aero style, eye candy better than Windows...Compiz and Beryl...
Windows biggest thing going for it is ease of use.
7. Akfred (Posts: 71; Member since: 08 Nov 2012)
Can u mention any company that has a very clean record
Or better than microsoft? Stop saying what u don't know
, Nokia will definitely grow higher and higher cos Microsoft
Great platform is doing better and better and with lots more
To come. Room was not built in a day . Get that fact dude
19. Commentator (Posts: 2328; Member since: 16 Aug 2011)
I think a lot of rooms have been built in a day, actually. It's not that hard: just put up a few walls, slap a roof on top and BOOM! You've got yourself a room!
35. papss (unregistered)
Funny guy eh? You got jokes
45. Commentator (Posts: 2328; Member since: 16 Aug 2011)
I'm just a simple man, trying to make my way in the universe.
53. panjgoori (Posts: 20; Member since: 17 Nov 2012)
it was because of Nokia name not WP. We will see how many devices Microsoft will sell without Nokia name.
15. akki20892 (Posts: 3302; Member since: 04 Feb 2013)
Nokia name on phone that stand for proud.
My last Nokia will be 930 :(
Waiting for 2016, pls come back Nokia. We will wait for u.
25. WindowsiDroid (Posts: 108; Member since: 22 Jul 2013)
Most of us buy Windows Phones because of Nokia Brand. I think if Microsoft change the branding name of devices it will be a total bad move from them.
32. Aboodbanafa (Posts: 19; Member since: 25 Apr 2014)
What will happen in 2016 , i read that in all of your comments
68. akki20892 (Posts: 3302; Member since: 04 Feb 2013)
Nokia is restricted in deal, they contract that after deal Nokia can't make phones till end of 2015. And they can start making phones in 2016.
22. XperiaFanZone (Posts: 1188; Member since: 21 Sep 2012)
They could or could not have sold themselves to other companies, but they'd no less of a devil.
24. arenanew (Posts: 142; Member since: 30 Dec 2013)
google is biggest devil duffer . microsoft is good and reputed company , google run amatured peopl which we called beggar . android is busy in selling underweear and personal information , plus q1 2014 huge loss .
microsoft have strong profit nokia in right hand . go microsoft bes of luck
30. shuaibhere (Posts: 1297; Member since: 07 Jul 2012)
Do you know what was happening in 1990's???U don't....
Microsoft is the most evil company in the tech world..
They use monopoly to throw competition out...
From compelling OEM's to not pre-install netscape navigator in their devices in that days to locking win8 devices know...
Even there is phone call recorded where MS top executives talking about EVIL WAR against netscape...
Bill gates was questioned about that he refused to answer and his reputation damaged many top magazines stated him as the evil doer of tech world..and after that he started all this donating thing to repair his damaged name...
And after 15 years everyone forgot what happened...and started to praise bill gates...
36. papss (unregistered)
I stopped reading an 1990... Get over yourself dude. 20 years ago and you are dwelling on it still.
39. shuaibhere (Posts: 1297; Member since: 07 Jul 2012)
They're still doing same things...
perhaps you should've read it completely...that'll explain you why microsoft is the most evil tech company!!!!
Single word MONOPOLY...
59. papss (unregistered)
You mean like Apple, Sammy or even you tube?
61. shuaibhere (Posts: 1297; Member since: 07 Jul 2012)
No..again you din read...
Apple is happy with profits they don't want everyone to buy their products....one example of that ios was ruling the smartphone world if it was microsoft others wouldn't have a chance to enter market...just like in PC world..
Youtube is ruling online video streaming but it never compelled it competitors....
Same goes for samsung...
27. Ashoaib (Posts: 1326; Member since: 15 Nov 2013)
Bye bye nokia... I will not remember you for long but I will remember that once I owned n82, 6233, 6300 and few more which I forget... RIP and plz plz dont ever come back again with any of your ugly phone
63. mmmanuuu (Posts: 207; Member since: 05 Nov 2013)
At first Nokia got attracted to Microsoft. Nokia moved in with MS. They got married. Then MS engulfed poor Nokia. End of the story.
2. QuadFace (Posts: 56; Member since: 19 Aug 2013)
Welcome back Nokia on a big way with onother name, i wish you success.
3. dexter_jdr (Posts: 1120; Member since: 28 Jun 2012)
i bet if they changed the "nokia" label on the front of the device,
Hell shall be released upon microsoft
6. CX3NT3_713 (Posts: 1676; Member since: 18 Apr 2011)
Is that a typo? And sweet Nokia + Microsoft = awesome
8. aayupanday (Posts: 513; Member since: 28 Jun 2012)
I Wanted a Pureview Android Device from them but that wish wasn't fulfilled.
9. mokhtar (Posts: 203; Member since: 06 Jan 2014)
No :'( .. Just no :s .. Still Nokia the best and the big name in mobiles world .. wish they keep the logo of nokia on smartphones .. or the name of the company
Btw i just bought a nokia lumia 1020 .. and it's just phenomenal .. Phenoomenaal
18. ihavenoname (Posts: 1319; Member since: 18 Aug 2013)
True, the network side of the Nokia is alive and doing well in Finland and thanks to selling the unprofitable cell phone side, they have no problems. Unfortunately cellphone side is gone and soon is Nokia branding also.
23. nokia12 (Posts: 302; Member since: 19 Nov 2013)
no Nokia branding isn't going anywhere only feature phones will loose nokia branding..
Ms cannot use name Nokia on its smartphones
13. brrunopt (Posts: 466; Member since: 15 Aug 2013)
For the 999999th time,
Nokia is not dead
Nokia doest belong to Microsoft
Microsoft bought a division from Nokia
Is there really the need for those misleading headlines ?
16. elitewolverine (Posts: 1352; Member since: 28 Oct 2013)
You are right, but people know Nokia, consumers that is, because of their phone division. Not because they sold 3g towers to carriers...
21. brrunopt (Posts: 466; Member since: 15 Aug 2013)
so what about educating just a little bit the consumers ? instead of wrong headlines and comments to keep the world "stupid"
31. shuaibhere (Posts: 1297; Member since: 07 Jul 2012)
That wouldn't help...
because people love nokia phones...
They don't care about nokia carrier or whatever it is...
Good luck for MS to sell smartphones with microsoft oy, mobile whateva it is...
people here buy lumia not because of wp but because of brand NOKIA..
40. brrunopt (Posts: 466; Member since: 15 Aug 2013)
sure you responded to the right comment ?
42. shuaibhere (Posts: 1297; Member since: 07 Jul 2012)
Yeah..I'm sure..first part was reply.. Second part was my opinion...
20. NokiaFTW (limited) (Posts: 1900; Member since: 24 Oct 2012)
I'm excited for the future. Nokia hardware plus MS software = Win. I'm waiting for newer WPs from Nokia and MS. The future looks bright. :)
37. papss (unregistered)
I couldn't agree more.. m$ + Nokia hardware are perfect.