Winnipeg Free Press

Winnipeg Free Press (Newspaper) - September 04, 2013, Winnipeg, Manitoba C M Y K PAGE B6 BUSINESS EDITOR: SHANE MINKIN 204- 697- 7308 business@ freepress. mb. ca I MARKET DETAILS B7 I winnipegfreepress. com WEDNESDAY, SEPTEMBER 4, 2013 B 6 SEATTLE - Microsoft Corp. has agreed to buy Nokia's handset business and license its patents for $ 7.2 billion, casting together the lot of two technologies companies trying to stay relevant against more fleet- footed rivals. The devices and services unit, which accounted for half of Nokia's 2012 revenue, along with 32,000 employees, will transfer to Microsoft, the companies said Tuesday. Nokia chief executive officer Stephen Elop, 49, will return to Microsoft after a three- year stint running the Finnish manufacturer. The move stoked speculation he may be a potential successor to CEO Steve Ballmer, who said last month he'd retire within 12 months. Nokia shares jumped as much as 48 per cent in Helsinki as the sale removes a drag from losses in the handset- making and turns the company into a network- equipment supplier. For Microsoft, the purchase marks its biggest foray into hardware as sliding personal- computer sales threaten demand for the Windows operating system that made it the largest software maker. " The question is whether combining two weak companies will get you a strong new competitor: It's doubtful," said Paul Budde, a telecommunications consultant in Sydney. " Both Nokia and Microsoft really missed the boat in terms of smartphones, and it is extremely difficult to claw your way back from that." Nokia, based in Espoo, Finland, racked up losses of more than five billion euros over nine quarters as Elop's comeback efforts failed to eat into the dominance of Apple and Google's Android platform in the smartphone market. The stock has slumped more than 80 per cent in the five years through Tuesday. The shares rose 38 per cent to 4.09 euros at 12: 40 p. m. in Helsinki, valuing Nokia at 15.4 billion euros. That compares with a $ 278- billion market capitalization for Redmond, Wash.,- based Microsoft. As part of the agreement, Microsoft will pay 3.79 billion euros for Nokia's devices division and 1.65 billion euros for patents, according to a statement from the companies. The all- cash transaction, subject to Nokia investors' approval, is expected to be completed in the first quarter of 2014. Nokia said it will book a gain of 3.2 billion euros, with the sale " significantly" accretive to earnings. It also said it aims to return its debt, which is ranked junk by all three major rating companies, to an investment grade. Chairman Risto Siilasmaa, who will become Nokia's interim CEO, said the company may return excess capital to shareholders. " It's a big transformation, but that's what you've got to do in the tech business to move forward," Ballmer said. The takeover is the largest for a wireless device- maker after Google's purchase of Motorola's handset unit in 2012, according to data compiled by Bloomberg. For Microsoft, the deal including the payment to license Nokia's patents is its second- biggest behind the $ 8.5- billion purchase of Internet telephone company Skype in 2011. With the latest sale, the original pioneers in the mobile- phone industry - Motorola, Nokia and Ericsson AB - have all ceased to be independent handset manufacturers or given up on the business. - Bloomberg News B RANDON - As WestJet Encore touched down for the first time on the McGill Field runway, a loud cheer erupted from the crowd gathered to witness the event. It's estimated more than 1,000 people came out to welcome WestJet to the community on Tuesday at the Brandon Municipal Airport. " It's just the absolute, unbelievable convenience," said Diane Peters, who was checking in on the first flight from Brandon to Calgary. " It won't be that drive from Winnipeg ... 20 minutes and we're at the airport," she said. " Just so quick and easy, it's going to be a lot of fun." Diane's husband, Gord Peters, president of Cando Contracting, said they have " waited for this day for many, many years." " It's huge for Cando," he said. " We keep air service, we keep our head office in Brandon. Without air service, Cando won't survive in Brandon. We have 300 employees across Cando, across the country, it's a huge day for us." People from Brandon and the wider Westman region came out to celebrate. A family- oriented event was held that included entertainment and refreshments. Jen Jackson said she wanted to come to the event to show her support for WestJet, a service she is looking forward to using. " It'll be more convenient with kids, less cost for hotels and travelling," she said. " I have family in Calgary, so I'll use it for sure." Cathy Wark of Minnedosa came to greet her brother arriving on the first flight. " For going to Calgary to visit, it'll be a lot handier," she said. " And it would be really nice to see them also do the jump to Winnipeg- Toronto." Mayor Shari Decter Hirst cheered and waved as she stepped off the first WestJet Encore plane in Brandon, along with several city officials. " This is such a phenomenal thing for our city and our region," she said. " Ferio, I want to thank you so much for giving us the opportunity to be part of a world where there is no such thing any longer as a distant destination." WestJet Encore president Ferio Pugliese was also on the first flight from Calgary to Brandon. " It's always a pleasure to come out and serve a new community where people really, really are welcoming and in need of air travel," he said. Daily flights, using smaller 78- seat turboprops, will leave Calgary at 9: 50 a. m. MT for the two- hour flight to Brandon, which will arrive at 12: 50 p. m. The return flight from Brandon to Calgary will take off at 1: 20 p. m. and arrive in Calgary at 2: 35 p. m. MT. When asked if and when WestJet might add another route from Brandon, possibly east to Toronto, Pugliese said it's all about supply and demand. " We're happy to supply air service where the demand supports it," he said. " We know that right now there's certainly a secure enough level of demand here in Brandon to support connectivity into Calgary, but thinking about connections east, that's not beyond the realm of possibilities at all." Pugliese said as WestJet Encore continues to build its fleet, they will start to reassess different markets to see what the potential is. Decter Hirst hopes to see other opportunities for flights heading east out of Brandon. " We don't want to rest on our laurels, we want to make sure that this continues to grow because this air service just means prosperity and vitality for our region," Decter Hirst said. Brandon West PC MLA Reg Helwer said it was " tremendously exciting" to be on the first flight into Brandon. He was in Calgary helping his two children settle in at university. " This opens up a lot of doors for people in Brandon... and outside to come and do business here and connect to the world," Helwer said. Brandon Chamber of Commerce president Craig Senchuk was also part of the city's contingent on the first flight. He said they were surprised to see how many people came out to celebrate. " I think it finally hit home that this is here and here to stay as long as we support it and keep buying flights," Senchuk said. " They're going to service us and service us well, so it's pretty exciting." jaustin@ brandonsun. com Welcome to Brandon, WestJet Long- awaited jet service arrives to jubilant reaction By Jillian Austin Microsoft buys Nokia's device biz, patents for $ 7.2B By Dina Bass, Ville Heiskanen and David Fickling Move hikes BlackBerry stock TORONTO - BlackBerry shares were slightly ahead Tuesday as some investors found hope the Canadian smartphone- maker could still be an acquisition target in the wake of the multibillion- dollar Microsoft transaction. The Waterloo, Ont.- based company's stock rose 11 cents to close at $ 10.75 on the Toronto Stock Exchange. The shift came after Microsoft Corp. announced plans to buy Nokia Corp.' s handset division for US$ 7.2 billion. The deal raised hopes pieces of Black- Berry's operations could still be in the sights of another technology company. However, it also decreases the likelihood Microsoft would be a player in a bid for the assets, said National Bank analyst Kris Thompson. " We don't really think these guys ( Black- Berry) are going to be around for much longer, unfortunately," he said, noting any asset sales would likely be done at below the company's overall trading market value. - The Canadian Press PHOTOS BY BRUCE BUMSTEAD / BRANDON SUN The first WestJet Encore flight makes a pass over the Brandon Municipal Airport on Tuesday morning. HENRIK KETTUNEN / BLOOMBERG NEWS Risto Siilasmaa, interim chief executive officer of Nokia ( centre), speaks with Stephen Elop, outgoing Nokia CEO ( right) and Timo Ihamuotila, chief financial officer of Nokia, Tuesday in Espoo, Finland. Brandon Mayor Shari Decter Hirst waves to those gathered Tuesday, followed by WestJet Encore president Ferio Pugliese. B_ 06_ Sep- 04- 13_ FP_ 01. indd B6 9/ 3/ 13 9: 47: 45 PM ;