Microsoft agree to buy Nokia’s devices and services business for €5.4bn

Microsoft gets rights to use Nokia’s name in connection with feature phones for 10 years. However, the period which Nokia has to wait before licensing the name to someone else, or making phones using the brand itself, is far shorter.

Microsoft is to buy Nokia’s mobile phone business and license its patents for €5.4bn, in an all-cash deal that will reshape the telecoms industry on two continents.

In a big bet by Steve Ballmer, Microsoft’s outgoing chief executive, that Nokia’s mobile devices can rival those of Apple and Samsung Electronics, the US software group has agreed to pay €3.79bn for the Finnish company’s phone unit and €1.65bn to license its patents.

The deal will transform Nokia into a telecoms equipment company from a handset maker and is the latest dramatic change in the company’s 148-year history. It also marks the end of a 30-year rollercoaster ride in the phone market for Nokia that saw it become the world’s biggest manufacturer of mobile handsets but also come close to financial ruin several times because of them.