Microsoft has agreed to buy Nokia’s mobile phone and smart devices business in a deal worth €5.4bn.
Under the deal, which gives Microsoft control of the Lumia smartphone range and brand, the company will also licence Nokia’s patents and mapping services for use in new devices.
Sales of Nokia’s Lumia smartphones account for around 75% of all handsets running Microsoft’s Windows Phone operating system.
Today’s deal helps Microsoft close the gap with rivals Google and Apple, both of which produce their own smartphones.
On completion of the deal, expected early next year, around 32,000 Nokia employees will transfer to Microsoft, including Nokia boss Stephen Elop.
“Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution,” said Microsoft CEO Steve Ballmer.
Risto Siilasmaa, Chairman of the Nokia Board of Directors, said the deal “offers future opportunities for many Nokia employees as part of a company with the strategy, financial resources and determination to succeed in the mobile space.”
Following the sale of its phones business, Nokia says it will focus on its network and mapping businesses.