Microsoft to purchase Nokia's handset business for $7.2bn


Microsoft Corporation on Tuesday said it would purchase Nokia's mobile phone business for 5.44 billion euros, and the Finnish firm said its CEO, Stephen Elop, would join Microsoft when the deal closed.

Finland’s Nokia, once the acknowledged leader in mobile phones, has been stressed to respond to the challenge from Smartphone makers such as Apple and Samsung. Analysts say Mr Elop’s bold bet in 2011 to take on Microsoft’s unproven Windows Phone software has yet to pay off.

The deal is likely to close in the first quarter of 2014 and is subject to approval by Nokia’s shareholders and regulatory approvals. Nokia partnered in 2011 with Microsoft and uses Microsoft’s Windows software to run its mobile phones.

Nokia, once a global leader in the mobile phone market, has struggled in recent times amid increased competition from rivals such as Samsung and Apple.

Microsoft has battled to stay related as consumers have shifted from using its core Windows software for PCs toward mobile devices from Apple and others. Face book and Google have also pushed ahead in social networking and online advertising, areas where Microsoft remains weak.

Microsoft will buy the Asha brand phones and will license the Nokia brand for use with current Nokia mobile phone products. Nokia will carry on owning and managing the Nokia brand.
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