Microsoft Corporation (NASDAQ:MSFT) announced its decision to sell its entry-level feature phone assets to FIH Mobile Ltd., a subsidiary of Foxconn Technology Group and HMD Global, Oy.
Details of the transaction
According to the software giant, FIH Mobile and HMD Global agreed to pay $350 million for its entry-level feature phone assets.
The deal also included Microsoft Mobile Vietnam, the software giant’s manufacturing facility in Hanoi with approximately 4,500 employees. The software giant said its employees will transfer or have the opportunity to work for FIH Mobile or HMD Global, Oy.
Microsoft will transfer substantially all of its feature phone assets including brands, software and services, care network, customer, contracts, critical supply agreements, and other assets as part of the transaction.
The company expected to complete the transaction in the second-half of 2016, subject to regulatory approvals and other closing conditions.
Microsoft will continue to develop Windows 10 Mobile and support Lumia phones such as the Lumia 650, Lumia 950 and Lumia 950 XL, and phones from OEM partners like Acer, Alcatel, HP, Trinity and VAIO.
Nokia phones will be back in the market
Meanwhile, HMD Global will bring back Nokia phones in the market after signing a licensing agreement with Nokia Technologies, obtaining the exclusive rights to use the Nokia brand on mobile phones and tablets worldwide over the next ten years.
HMD Global plans to invest $500 million over the next three years to “support the global marketing of Nokia-branded mobile phones and tablets.”
Arturo Nummela, CEO of HMD Global said, “We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers. Branding has become a critical differentiator in mobile phones, which is why our business model is centered on the unique asset of the Nokia brand and our extensive experience in sales and marketing.
