Microsoft’s $100 billion Nokia acquisition: Absolutely unbelievable! [April Fool!]

Note: It’s gone midday now in London so I want to point out that this story is an April Fool!

Steve Ballmer of Microsoft got up on stage at 7am this morning in London to announce that they intend acquiring Nokia for $100 billion in a mixture of cash and equity — a substantial premium over the company’s $58.2 billion market cap. The markets are going nuts, as one might expect, with Nokia shares topping $20 each, sending their current valuation to well over $74 billion already. Ballmer and the team at Microsoft presumably expected this rally based on their tabled offer. Of course, it’s important to point out that this is just the opening gambit and that although Ballmer claimed that institutional investors (who account for a large portion of Nokia stock) are in favour of the deal, there is no guarantee that they’ll be able to reach agreement for the whole company.

But there’s a sweetener: Microsoft is offering Nokia shareholders 2 shares for every Nokia share — a smart move seeing as Microsoft’s market capitalization closed yesterday well north of $250 billion.

Now then. What does this impending transaction mean for the marketplace?

Shocking. Absolutely shocking. Whilst there’s long been rumours that someone might snap up Palm, the fact that Microsoft has made a bid for Nokia changes things dramatically. There’s been no secret that Microsoft — once dominant — has really screwed up their mobile division time and time again. But they’ve got the cash pile, the patience and the market clout to keep at it.

Analysts reckon that whilst Microsoft’s new Windows Phone has a pretty good chance of success in the North American markets, the reality is that India, China and the other major developing economies are completely cold to Microsoft. And guess who’s storming ahead in those sectors? Nokia. 1.2 million handsets a day fly out the Nokia factories, many of them low-end handsets aimed at the developing countries.

Why would Microsoft want in there? Let’s put this in perspective. In December 2009, India added 19.2 million NEW mobile customers. That’s like adding the equivalent of o2 UK every month. Just in India! Every single one of those customers needs a handset (not necessarily a new one, by the way) and every single one of them is going to want to start using basic mobile services — something Nokia has been investing in heavily with it’s Ovi Suite. Did you know, for example, that Nokia Messaging is now in use across 70 countries? So if I buy a new reasonably priced Nokia handset, guess what, I get email, instant messaging, Maps, sharing, the whole shebang, all included. Microsoft wants in there.

And goodness me they’ve got the cash to make it work.

There’ll be a bit of a culture shock though. Ballmer explained that he reckons that if the acquisition was to go ahead, they’d run Nokia as a separate unit for at least 2 years whilst the work out how precisely to integrate the companies.

A sensible move.

Anyway, let’s see how things go.

An exciting morning!


  • Tom

    Come on, this kind of April Fools joke is lame. Be more creative.

  • wow just wow! good move for them. but thats insanity.

  • No, no, no it's all wrong. Nokia is worth at least $1 trillion, even if most of it is in Microsoft stock. The major opportunity is not India but Mars and Jupiter. Think of all those aliens who might buy Nokia mobiles.

  • what a gr8 1st april fool s 😀 nearly had me going till i seen the date lol

  • leewright

    Let the April Fool's stories begin!

  • MightyMicro

    Then Apple buys Microsoft, right? 🙂

  • …and the circle is complete!

  • Tata

    It may April Fool , who knows it

  • Seriously, April Fools, or for-real?

    I was actually talking to a friend at Microsoft who was saying how M'soft should just buy up Nokia (a discussion that happened about three weeks ago)- that they have the cash to do so, and that M'soft needs to do something to buck-up it's mobile position in the market.

    Anyhow- the title: “Absolutely unbelievable!” doesn't help either; I guess I'm just gullible.

  • nacho

    Excellent! Twitter should by Google and maybe we’ll learn to speak with animals

  • maq_ecosse

    if this hits the twitter-world big time & Nokia shares DO take a jump – hope they'll credit you with helping and shell out a back-hander to buy that pram for you & the wife……….. :-p

  • maq_ecosse

    but then who buys Google ?

  • That will be part of the Top ten April Fools hoaxes‎

  • An #AprilFools ??

  • An #AprilFools ??

  • Yahoo? hahahah

  • I'm totally buying them all later today. But the press release wont be out till liek 4.

  • And what will be the name of their company if ever they merged?? yah-no-go-soft?

  • Steve Green

    You'll pay for this McCloud…..

  • Sorry Steve 😉

  • Deji Alade

    lol, guess it wasn’t april fool huh? lmao!!!!

  • Hah! Well spotted!

  •  Looks prophetic, apart from the price

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