03rd September 2013 Microsoft buys smartphone division and possible new CEO from Nokia.

Microsoft (MSFT) has announced that it will purchase Nokia's (NOK) devices and services division as well as licence a number of patents for $7.2 billion.

The deal will see Microsoft pay close to $5 billion for the division responsible for making smartphones, including the Lumia series which uses the Windows operating system, and tablets, with leaks of a Windows RT tablet surfacing last month. $2.2 billion will be paid to licence a number of Nokia patents.

Among the 32,000 new employees that will transfer from Nokia to Microsoft is its CEO Stephen Elop, formerly head of Microsoft's business division. Elop departed in September 2010 to take the helm at Nokia and within 5 months announced a new strategy for the company whereby they abandoned their own Symbian and MeeGo platforms for smartphones and joined with Microsoft, creating the Lumia series. Elop has stood down as Nokia CEO effective immediately and will shortly become the Vice President of Microsoft's devices and services division which will incorporate its Nokia purchases.

Elop is now being touted as a possible candidate to take over as CEO of Microsoft from Steve Ballmer when he steps down. Ballmer has met with some opposition as he tries to move Microsoft's focus towards devices which, bar the Xbox, hasn't been a great success for the company to date. Elop could serve as a compromise, having experience both at Nokia in devices and in working on core Microsoft products such as Office 2010 from his previous time at the company.

Shares in Nokia have jumped 42% to $5.55 on the NYSE, their highest since April 2012. Microsoft is down 5%, nearing its price before from the announcement of Steve Ballmer's resignation gave it a boost.