Microsoft buys up Nokia’s handsets

The takeover of Nokia by Microsoft brings to a close the sorry saga of the once all-conquering Finnish mobile-phone maker.

Microsoft is to buy Nokia's mobile handset division for €5.44bn (£4.6bn). The software giant is paying €3.79bn for the Finnish firm's mobile operations and €1.65bn to license its patents for ten years. Microsoft will also provide the struggling company, which made a $4bn loss in 2012, with a €1.5bn financing facility. Nokia's chief executive, Stephen Elop, formerly of Microsoft, will rejoin the US giant and is tipped to replace Steve Ballmer.

Nokia's shareholders are clearly keener on the deal than Microsoft's. Microsoft shares fell 4.5% on Tuesday wiping $11bn off its value while Nokia's gained 34%. Investors fear Microsoft will struggle to compete with Apple and Samsung in the smartphone market.

What the commentators said

"Tragedies end badly," agreed Lex in the FT. Nokia was worth more than €200bn in 2001. Now it is flogging its core business for just €5.4bn. This is "value destruction of a rare order". Nokia's investors "should be spitting, not relieved". And it's not a great deal for Microsoft either, said Rolfe Winkler in The Wall Street Journal. Steve Ballmer couldn't leave his replacement without a smartphone strategy, so he "had to buy a chunk of Nokia". But it's an admission of weakness. Without Nokia, Microsoft would lose its "toehold" in the smartphone market. The deal is "pretty small" against Microsoft's $61bn cash, but "it had little choice but to do it anyway".

Recommended

The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into
2 Mar 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
27 Feb 2023
The outlook for Shell shares is mixed, despite bumper profits
Energy stocks

The outlook for Shell shares is mixed, despite bumper profits

With profits surging, it looks as if Shell is on a roll, but the company’s growth from here is hard to see as Rupert Hargreaves explains.
6 Feb 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023

Most Popular

Where will house prices go in 2023?
House prices

Where will house prices go in 2023?

We explore what could happen to house prices in 2023 as the market continues to slow down.
24 Mar 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Ofgem’s price cap is now predicted to fall below £2,000, based on average typical use, from July, for the first time since 2022. We have all the detai…
21 Mar 2023
5 top UK tech stocks
Investments

5 top UK tech stocks

The UK market has never been considered a fertile hunting ground for tech stars. But there are plenty of promising companies beyond the old economy, s…
23 Mar 2023