Normally Labor Day is a day of rest where you spend time with your family. Except for this Labor Day where it is apparently a day of international dealing. Word just broke that Microsoft is buying the devices and services arms of its closest device partner, Finnish phone maker Nokia for just a hair under $5 billion. They will also pay Nokia $2.18 billion for a 10-year license of Nokia’s patent Inventory with an extension option.
The deal is expected to close in the first quarter of 2014 and will involve 32,000 employees moving over to Microsoft, Nokia’s Lumia Windows Phone and Asha feature phone branding, and pretty much everything related to those brands. Microsoft will also have a license to use the Nokia name on its products. There is also an agreement for Microsoft to use the HERE mapping service and for Nokia to use Microsoft patents in HERE.
Beyond acquiring the devices and services arm, Microsoft might have acquired something else. Or shall I say reacquired? As part of the transaction, Nokia CEO Stephen Elop, Executive Vice President of Smart Devices Jo Harlow, Executive Vice President of Operations Juha Putkiranta, Executive Vice President of Mobile Phones Timo Toikkanen, and Executive Vice President of Sales and Marketing Chris Weber will join Microsoft. Elop will step aside as CEO to become Executive Vice President of Devices and Services. Chairman Risto Siilasmaa will become interim CEO.
Stephen Elop, prior to joining Nokia, was head of Microsoft’s business unit from January 2008 to when he was named Nokia CEO in September of 2010. Prior to that, he worked his way from the Web/IT department at Macromedia all the way to COO and then CEO before the company was acquired by Adobe. With prior CEO experience, prior Microsoft experience, and a background with both business products and consumer electronics, combined with timing make Elop a likely candidate to replace outgoing Microsoft CEO Steve Ballmer.
Windows Phone and Nokia fans, do you like Microsoft’s acquisition? What do you think of Stephen Elop as a potential Microsoft CEO? Leave your comments below or hit us up on social media. You can also read the joint blog by Steve Ballmer and Stephen Elop here.