Seminar paper from the year 2018 in the subject Business economics - Business Management, Corporate Governance, grade: 1.3, , language: English, abstract: The aim of this report is to provide an in-depth analysis of Microsoft's acquisition of Nokia's devices and services business for EUR 3.79 billion, the surrounding circumstances, and the proceedings. In order to evaluate whether a merger or an acquisition can be considered successful, a number of factors have to be taken into account, ranging from financial improvements to business synergies, the latter one to be fairly challenging in terms of a direct attribution of value creation. During 2011, Microsoft and Nokia entered into a partnership which resulted in the rollout of the Windows Phone. However, in 2013 increased competition and Nokia's financial situation prompted both parties to consider a deal with the purpose of Microsoft acquiring Nokia's mobile divisions. The consequence was a carve out and Nokia's disintegration of the smartphone market. This report will first give an overview of the sector, in which the deal took place, followed by an outline of other relevant M&A activities in the TMT industry during the same time horizon. Subsequently, both the acquirer and the target company are introduced, giving a historical overview, an explanation of the business model, an analysis of the key financials, and information on previous M&A activities involved. Then, the purpose of the deal is discussed, elaborating the perspectives of both parties on the underlying strategic implications for the acquisition, followed by impartial skepticism. Subsequently, the analysis of the acquisition is conducted, which starts off with the structure of the deal including general information on various surrounding conditions, and eventually proceeds to the deal valuation and related market sentiments. Eventually, a post-acquisition analysis is provided in order to evaluate the aftermath of the deal by taking into account financial, human resources, and business considerations of both parties, followed by a final conclusion.
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