Mobile: Microsoft buys Nokia’s phone unit
Microsoft will acquire Nokia’s handset business for $7.2 billion, said Nick Wingfield in The New York Times. The companies this week announced the all-cash transaction, “which is meant to turn the Finnish mobile-phone pioneer into the engine for Microsoft’s mobile efforts.” As part of the deal, 32,000 Nokia employees will join Microsoft, including Stephen Elop, Nokia’s CEO and a former Microsoft executive. Some have speculated that the deal will set Elop up “as a potential successor” to Microsoft CEO Steven Ballmer, who said last month that he would retire from the company within the next year.
The Nokia deal “is an apparent acknowledgment that Microsoft needs a stronger hand to play in the mobile-phone business,” said Shira Ovide in The Wall Street Journal. The company has been “playing catch-up” with competitors, including Apple, Google, and Samsung. “For Microsoft, this is a bold step into the future,” Ballmer said in a letter to employees. Microsoft will pay $5 billion for Nokia’s devices and services, and an additional $2.18 billion to license the Finnish phone--maker’s patents. Microsoft said it plans to use overseas cash to pay for the transaction, which the companies hope to complete in early 2014.
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Buyouts: Verizon and Vodafone reach huge deal
Verizon Communications will pay $130 billion to gain full control of its mobile-phone subsidiary, said Ilaina Jonas and Edwin Chan in Reuters.com. Verizon said this week that it would buy out U.K.-based Vodafone Group’s 45 percent share in Verizon Wireless in exchange for $58.9 billion in cash, $60.2 billion in Verizon stock, and “an additional $11 billion from smaller transactions.” Both companies’ boards unanimously approved the deal, which they hope will close early next year. “The deal marks the third-largest announced acquisition in corporate history and British telecom giant Vodafone’s exit from the large but mature U.S. mobile market.”
Tech: LinkedIn will offer $1 billion in shares
LinkedIn plans to raise $1 billion in a stock sale, said Ari Levy in Bloomberg.com. The professional networking website announced its plans this week in a filing with the Securities and Exchange Commission. The company’s sale of 4.17 million Class A shares is seen as a way for it to cash in on the fivefold increase in its stock value since its initial public offering in 2011. In its most recent quarterly report, LinkedIn reported no debt and $873 million in cash and cash equivalents.
Autos: Car sales boom for GM, Chrysler, and Ford
Detroit car companies are doing well, said James R. Healey, Fred Meier, and Chris Woodyard in USA Today. American automakers “reported numerous sales records for brands and models” last month, largely owing to better products, low-interest loans, and cheap leases. “Big trucks and SUVs led the way, in a remarkable rebound.” One standout seller was Ford’s F-series pickup, which topped 70,000 in sales for the month, the “second time this year it’s surpassed that mark.”
Economy: Trade gap widens to $39.1 billion
The U.S. trade deficit widened by 13 percent in July after hitting a three-year low in June, said Jim Puzzanghera in the Los Angeles Times. The increase—to $39.1 billion from June’s $34.5 billion—included a $3.5 billion rise in imports, signaling greater domestic demand for consumer goods and automobiles. Imports of crude oil, car parts, cellphones, clothes, and appliances all rose. But exports of capital and consumer goods waned, thanks largely to a sluggish economy in Europe and a slowdown in emerging markets.
