September 3, 2013 Last Updated 7:29 am

Microsoft acquires Nokia’s devices & services business in 5.44 billion euro deal

The widely anticipated acquisition of Nokia by Microsoft was announced this morning. Microsoft will purchase Nokia’s Devices & Services business, license Nokia’s patents, and license and use Nokia’s mapping services for 3.79 billion euro, and will pay 1.65 billion to license Nokia’s patents.

Microsoft said it will draw upon its overseas cash resources to fund the transaction.

[edge_animation id=”3″]“We are excited and honored to be bringing Nokia’s incredible people, technologies and assets into our Microsoft family. Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we anticipate a smooth transition and great execution,” said Steve Ballmer, Microsoft’s outgoing chief executive officer.

Under the agreement, Nokia’s 32,000 employees involved in mobile phones will now become Microsoft employees, that includes former Microsoft executive Stephen Elop.

NokiaLumia-lgNokia had bet on Microsoft’s Windows Phone platform to turn its fortunes around, but sales have been light, and the price of its products have been dropping – its average smartphone price fell to 157 euros from 1914 euros in its latest earnings report. The move may save Microsoft from losing its only significant OEM in the space, but now Nokia is more or less permanently wedded to the Windows platform.

Separately, Microsoft announced recently that it would make permanent its price drop for its high end tablet, the Surface Pro. Microsoft lowered the price to $799 and lowered the price of its touch covers, reducing the price by $40 in hopes of spurring demand.

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