Microsoft Acquires Nokia Mobile Phone Business For $7.2 Billion
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Microsoft Acquires Nokia Mobile Phone Business For $7.2 Billion

Microsoft Acquires Nokia Mobile Phone Business For $7.2 Billion
  Microsoft announced on 3 September, 2013 that it is poised to take over Finland-based Nokia’s mobile phone business for $7.2 billion along with the news that the present CEO of Nokia, Stephen Elop, would join Microsoft once the transactions is closed. Nokia, the leading manufacturer of mobile phones, has been facing immense obstacles and challenges in trying to keep pace with the popularity of the smart phone products that are doled by Samsung and Apple.  This progression would not only give Nokia a new perspective to the existing business with Microsoft’s Windows Phone software, but would also provide Microsoft Inc. with a bold entry into the world of mobile devices. With the breaking of this news the Microsoft shares dipped by nearly 6% which took away more than $15 billion of the company’s market value, as investors were not keen to acquire an underperforming company that had incurred losses to the tune of $4 billion in 2012. Steve Ballmer, CEO Microsoft, who is due to retire soon, is trying to position Microsoft with companies like Apple- and the move to acquire Nokia was a step towards that goal.  The current Nokia CEO, Stephen Elop, was earlier the head of the business software division of Microsoft until he switched over to the Finnish mobile company in 2010.  However with the new acquisition, he would return back to Microsoft to lead the mobile devices business and also at a time when the software giant is looking our for a successor to Ballmer. Elop’s tenure at Nokia saw him going through three years of an increasing collapse in market share, whilst being at the helm of affairs.  Nevertheless, he hold true potential and is strongly being considered a potential successor as he has the capacity to take over the sprawling Microsoft business. However, back home in Finland, the media has labeled Elop as a ‘Trojan Horse’ who has handed over the reins of a strong European company to the U.S.  The Microsoft and Nokia acquisition is prompting a lot of speculation in the market and amongst investors who are uncertain of Ballmer’s leadership potential to revive an underperforming company and bring it at par amongst the other top rivals in the arena of mobile devices. Carolina Milanesi, analyst at Gartner has stated in support of the move:"Microsoft cannot walk away from smartphones, and the hope that other vendors will support Windows Phone is fading fast. So buying Nokia comes at the right time.  In today's market it is clear that a vertical integration is the way forward for a company to succeed. How else could Microsoft achieve this?" For a Nokia on the whole, the deal might have been a profitable one as the company had lost a lot of its market share and is struggling in the smart phone segment.  However, to the Finnish people, it is an emotional moment as this alliance means a national loss.
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