Nokia Shareholders Say Yes to Sale of Mobile Phone Unit to Microsoft

Virtually all of the shareholders at Nokia gave the go-ahead this week for the $7.4 billion sale of the Finnish company's mobile phone unit to Microsoft, according to news reports.

Next, the deal to transfer Nokia's Devices & Services business to Microsoft is expected to close in the Q1 of 2014, as long as regulators give their approval.

"This is a significant step forward for Nokia. We are delighted that shareholders have given us overwhelmingly strong support to proceed with this transformative agreement," Nokia board chairman Risto Siilasmaa said in a statement on Tuesday. "Today's vote brings us closer to completing a transaction which will mark the beginning of the next chapter in Nokia's near 150-year history, offering the potential of greater value for shareholders.”

Under the deal, Microsoft will also license Nokia patents. Also, Nokia's 4,700 Finnish employees who now are based in the devices and services unit will be transferred to Microsoft. Overall, some 32,000 Nokia employees will now belong to Microsoft, according to TechCrunch. Microsoft will see revenue jump by about $20 billion, according to a report from RT, and it will become more of a player in mobile devices. That is a longer-term goal of the company, considering success of rivals like Apple and Samsung.

Nokia CEO Stephen Elop will return to Microsoft, under the deal, too, and he may even be a top contender for the CEO post at Microsoft. Microsoft will license and use Nokia’s mapping services – under the deal.

Following the acquisition, Nokia will still be a separate business. More information on the company’s future will be released soon.  The patents business is considered to be important for the future of the company. Nokia will not make mobile devices for next two and a half years, and will only license its brand to Microsoft during the time period. It may likely focus on telecom equipment in the future. After the deal closes, Nokia's earnings and finances are “expected to strengthen significantly," Nokia CFO Timo Ihamuotila said recently, according to ZDNet.

Still, Finland Prime Minister Jyrki Katainen told Vesti Finance, "The Nokia mobile phone is a symbol of economic growth. I would even call it an economic miracle of Finland. But now the country goes through difficult times. We have problems with the ship-building industry; many paper-mills are closed. And there is a dilemma for the state, whether to help the large companies. But we have such an approach – we never support the unprofitable industry. And Finns understand it. Otherwise we would have run out of money.”