Is Microsoft about to spend $19 billion to buy Nokia's phone division?

posted by Alan F. / Jun 01, 2011, 1:03 PM

Is Microsoft about to spend $19 billion to buy Nokia's phone division?

A tweet sent out from Eldar Murtazin hints that the suits at Microsoft have come to the conclusion that they could spend $19 billion to buy Nokia's phone division. Of course, that is a far cry from saying that Microsoft would make the purchase. Talk of a buyout of the Finnish firm's phone subsidiary by the guys at Redmond has been circulating ever since Nokia decided to use Windows Phone 7 in its handsets. And don't forget that Nokia executive Stephen Elop came from Microsoft.

This tweet from Eldar Murtazin says that Microsoft has decided that it could spend $19 billion to buy Nokia's phone division

While Microsoft might be able to finance a $19 billion deal, no matter how you look at it, the company will be spending a lot of money for a business that has been losing market share. For this deal to make sense, Microsoft must feel confident that they can add something to the hardware that will be able to reverse Nokia's recent performance.

If the deal is structured using equity, current stockholders are not going to take too kindly to the dilution of their holdings. As of the latest quarterly report, Microsoft had $48 billion in cash, so they might be able to use cash on hand to make a purchase. Although there is nothing in Murtazin's tweet that says that a deal is going to happen, with Nokia's stock at a 13 year low as we reported earlier today, the gang at Redmond might be getting a great bargain if they decide to make the purchase now.

source: IntoMobile

Options

5 Comments

1. corps1089

Posts: 492; Member since: Jan 20, 2010

Why alienate Nokia's fanbase iwth a move like this? Nokia's problem has been one of losing market share and if MS buys the phone division, this would only compound the problem due to MS haters and alienating Nokia's installed base...

posted on Jun 01, 2011, 1:22 PM 4

2. snowgator

Posts: 3621; Member since: Jan 19, 2011

If so, I will be the first to admit I was 100% wrong. I still do not think Nokia wants to sell it's profitable division. It is still the largest mobile phone maker in the world, and that means the ONLY direction it could have gone is down. Nokia can rebound. Microsoft is in a position right now to simply profit off of Nokia's hardware and name. Why mess with that?

posted on Jun 01, 2011, 1:23 PM 4

3. bluechrism unregistered

While this makes some sense, I don't see it happening. I think MS would do better with the status quo as it is right now. Nokia will build great hardware for windows phone. As will HTC, Samsung, Acer, Dell, etc. If miicrosoft wants to control the whole thing from top to bottom they could but this would be a big mistake as you would have single maker of windows phone and would leave the market for those manufacturers who are OK not having their own OS all going to Android or (if it is a genuinely compelling option a few years from now) MeeGo. Companies look at Apple and say, they have a captive and closed market - that must be good. but copying the worst aspects of apples model ins't going to pull in the punters. Keeping the platform as it is with Nokia contributing and many handset makers selling gives MS the opportunity to be big players in mobile, not just another also-ran at the side like WebOs will likely be (however good it is).