Microsoft (NASDAQ: MSFT) has agreed to acquire the cellphone business and license the patents of Nokia for $7.2 billion in cash as Microsoft seeks to increase its footprint in the mobile device market.
The transaction is subject to approval from Nokia stockholders and regulatory clearances and Microsoft expects the transaction to close within the first quarter of 2014, Microsoft said Tuesday.
As part of the agreement, Microsoft will absorb Nokia’s 32, 000 manufacturing, assembly and packaging workforce.
“With ongoing share growth and the synergies across marketing, branding and advertising, we expect this acquisition to be accretive to our adjusted earnings per share starting in FY15, and we see significant long-term revenue and profit opportunities for our shareholders, ” said Microsoft CEO Steve Ballmer.
Nokia has capabilities in “areas such as hardware design and engineering, supply chain and manufacturing management and hardware sales, marketing and distribution, ” he added.
Microsoft says it will have access to Nokia’s patents over 10 years upon completion of the deal and will pay separately to license the handset maker’s HERE mapping service.
The software firm also announced plans to invest a quarter-billion dollars in a new data center in Finland.