Microsoft is to buy Nokia's mobile phone business and license its patents in a deal worth $7.2bn (£4.6bn).
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In an email to employees, Microsoft CEO Steve Ballmer explained how Microsoft is purchasing Nokia's Devices and Services business, which includes its smartphone and mobile phone divisions, design teams, manufacturing and assembly facilities and all operations, sales and marketing teams.
It will also inherit Nokia's Herec cloud-based mapping platform, which already provides global positioning services to Microsoft's Bing search engine, as well as location devices for Garmin, BMW, Oracle, Amazon and Yahoo.
Ballmer called the move "a bold step into the future" for Microsoft, and the "next big phase of the transformation we announced on July 11", referring to the recent management overhaul the CEO oversaw.
Microsoft's acquisition of Nokia has not been finalised yet, but Ballmer said he expects the deal to close in the first quarter of 2014, "following approval by shareholders, regulatory approvals, and other closing conditions".
Nokia's former CEO and current European vice president Stephen Elop will also be moving back to Microsoft as part of the deal, where he will be "leading an expanded Devices team", explained Ballmer. Between 2008 and 2010, Elop headed up Microsoft's Business Division, taking charge of the Microsoft Office product. He has also been cited as one of several "favourite" names to succeed Ballmer when the CEO serves out his 12-month notice.
Ballmer added that Julie Larson-Green - who has also been tipped for the CEO spot - will continue to run the Devices and Studios team, with a focus on Xbox One and Surface properties - before joining Elop's team after the acquisition and working "with him to shape the new organisation".
He also revealed that "key engineering leads" from Nokia will retain their positions, including smart devices VP Jo Harlow and Timo Toikkanen, who leads Nokia's mobile phone team.
Ballmer's email suggests that Nokia's assets will be completely absorbed into the Microsoft ecosystem, saying the company plans "to pursue a single set of supporting services for our devices".
Nokia was founded in Finland in 1865, and enjoyed long-term dominance of the mobile phone sector through the 1990s and early 2000s. However, it had trouble reacting to the growth of the smartphone sector, relying for too long on camera-based feature phones. Abandoning its Symbian phone OS in 2011, Nokia announced an exclusivity deal with Microsoft that helped the software company compete in a market ruled by Apple's iOS and Google's Android, and which had proved particularly hostile to earlier Windows Phone efforts.
However, despite its partnership with Microsoft, Nokia continued to struggle, making sales of only $7.5bn in Q2 2013, compared to Apple's $35.3bn.
