Nokia Agrees to Sell Devices & Services Business to Microsoft in All-Cash...

Nokia Agrees to Sell Devices & Services Business to Microsoft in All-Cash Transaction

2027

Espoo, Finland—Nokia signed an agreement whereby it will sell substantially all of its Devices & Services business, including its Mobile Phones and Smart Devices units and an industry-leading design team, and license its patents to Microsoft for 10 years for EUR 5.44 billion. Nokia expects to book a gain on the sale of EUR 3.2 billion.

The transaction is expected to close 1Q 2014, subject to approval by Nokia shareholders, regulatory approvals and other closing conditions. Following the transaction, Nokia will focus on its three established businesses: NSN, a leader in network infrastructure and services; HERE, a leader in mapping and location services; and Advanced Technologies, a leader in technology development and licensing.

“After a thorough assessment of how to maximize shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders,” said Risto Siilasmaa, chairman of the Nokia board of directors and, following the announcement, Nokia’s interim CEO.

At closing, approximately 32,000 people are expected to transfer to Microsoft. Nokia’s chief technology office organization and patent portfolio will remain within the Nokia Group.

In addition to the 10-year nonexclusive patent license agreement, Nokia will grant Microsoft an option to extend this mutual patent agreement to perpetuity. Additionally, Microsoft will become a strategic licensee of the HERE platform and will separately pay Nokia for a four-year license. This revenue stream is expected to substantially replace the revenue stream HERE is currently receiving from Nokia's Devices & Services business internally. If the transaction closes Microsoft is expected to become one of the top three customers of HERE.

Microsoft also has agreed to a 10-year license arrangement with Nokia to use the Nokia brand on current Mobile Phones products. Nokia will continue to own and maintain the Nokia brand. nokia.com

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