Nokia Interim CEO: Microsoft deal makes us stronger

Nokia's interim CEO Risto Siilasmaa says that Microsoft's acquisition of Nokia's device and services unit can only make the firm financially stronger and better able to compete.
Written by Charlie Osborne, Contributing Writer

Nokia's interim chief Risto Siilasmaa has said that once Microsoft's acquisition of the Finnish firm's device and services unit is finalized, the company "will continue to have three strong businesses."

In an interview with AllThingsD, the temporary chief, who has taken over from CEO Stephen Elop who will join Microsoft once the acquisition closes, believes the move is the right decision for the once-dominant handset maker.

Siilasmaa commented:

"We will continue to have three strong businesses. Overall we are very happy with the fact we will be able to support those businesses with a much stronger balance sheet."

On Monday, Microsoft announced its intentions to buy Nokia's mobile division for about $5 billion (€3.79bn), with an additional $2.17 billion (€1.65bn) to be spent on licensing Nokia's extensive patent portfolio.

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The Finnish firm is left with its networking equipment division, patent portfolio and HERE location-based services industry. Microsoft will license the company's 8,500-strong design patent portfolio in addition to Nokia's 30,000 utility patents. Microsoft says that the change in terms will result in better mobile device profits by increasing a gross profit margin of less than $10 per Windows Phone sold to over $40 per unit. In addition, the Redmond giant will pay Nokia annually for mapping data, and Nokia will refine HERE applications for cross-platform support.

While the deal will potentially see Microsoft becoming a stronger force in the smartphone sector -- and granting the Windows Phone and app ecosystem a much-needed boost -- Nokia will become a far smaller, focused firm after losing out to rivals including Samsung and Apple in the modern mobile device market and jumping ship.

See also: Does its Nokia buy thwart or fuel a possible Microsoft break-up?

Within the interview, Siilasmaa insisted that the company's employees would benefit from the sale. Nokia currently hires roughly 88,000 members of staff, 32,000 of whom will be transferred to Microsoft's new division once the deal is complete.

Speaking to The Financial Times, the temporary chief, while the company looks for a permanent replacement for Elop, said:

"After a thorough assessment of how to maximise shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders."

Siilasmaa admitted that negotiations began in late January or early February, and the Nokia board had met over 50 times to discuss the possibilities of a deal.

The Microsoft-Nokia acquisition, which requires regulatory approval and acceptance from shareholders of both companies, is expected to close in the first quarter of 2014. 

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