Microsoft Buys Nokia For $7.2B

Microsoft has purchased Finland-based Nokia's cell phone business in a $7.2B deal that the New York Times is calling an "audacious effort" to capture the mobile market that has "largely passed it by."

Late Monday, Microsoft and Nokia said 32,000 Nokia employees would join Microsoft as a result of the all-cash deal, which is meant to turn the Finnish mobile phone pioneer into the engine for Microsoft’s mobile efforts. Stephen Elop, the former Microsoft executive who was running Nokia until the deal was signed, will rejoin Microsoft after the transaction closes, setting him up as a potential successor to Steven A. Ballmer, Microsoft’s chief executive. Mr. Ballmer has said he will retire from the company within 12 months. The Nokia deal echoes Google’s $12.5 billion deal to acquire Motorola Mobility, which gave Google control of a trove of mobile patents and a handset business that has yet to shine under Google’s ownership.

The above-linked article notes that Microsoft is using offshore cash for the deal and will therefore avoid US taxes. Microsoft made a similar deal in 2011 when it paid $8.5B for the Estonia-based Skype.