Microsoft will Buy Nokia's Devices and Services Business

Microsoft will buy Nokia's devices and services business and license Nokia's patents and mapping services in a deal the companies valued at $5.44 billion euros, or about $7.2 billion, the companies announced late Monday.

Shannon Stapleton / Reuters file

Nokia CEO Stephen Elop unveils Nokia's Lumia 1020 smartphone July 11, 2013, in New York. Elop will join Microsoft once the deal between the two companies is completed.

Nokia CEO Stephen Elop, who was hired away from Microsoft by the Finnish company in 2010, will rejoin Microsoft after the deal is completed, the companies said, perhaps putting him in position to succeed Microsoft CEO Steve Ballmer, who has announced he plans to retire.

In a joint news release from the two companies, Ballmer said the deal will bring Nokia's capabilities in hardware design, engineering, manufacturing, sales, marketing and distribution to Microsoft.

"For Microsoft, this transaction is the key next step in furthering the company's transition to a devices and services company," the statement said.

When the deal closes, expected to be in early 2014, about 32,000 Nokia employees will transfer to Microsoft. Nokia Chairman Risto Siilasmaa will take over CEO duties while the Espoo, Finland-based company looks for a new CEO.

Ballmer surprised the technology world Aug. 23 by announcing he would step down as CEO of Redmond, Wash.-based Microsoft within 12 months, ending a tenure marked by the software giant's declining dominance and struggles to keep pace with its competitors.

Microsoft said then that Ballmer would retire "upon the completion of a process to choose his successor. In the meantime, Ballmer will continue as CEO and will lead Microsoft through the next steps of its transformation to a devices and services company."