Nokia's brand goes to startup with $500M plan

May 18, 2016 // By Peter Clarke
A startup called HMD Global Oy (Helsinki, Finland) has been formed to takeover the Nokia brand for mobile phones and tablet computers and has said it intends to spend $500 million marketing Nokia as an Android-based mobile device over the next three years.

HMD has signed a license agreement with Nokia Technologies, the licensing unit of Nokia Corp., giving HMD sole use of the Nokia brand on mobile phones and tablets worldwide for a decade as well as licenses to patents essential to cellular communications standards. The company has conditionally agreed to acquire from Microsoft Corp. the rights to use the Nokia trademark on feature phones until 2024, and design rights relating to Microsoft's feature phone nusiness. This transaction is expected to close in the second half of 2016.

HMD is owned by Smart Connect LP, a private equity fund managed by Jean-Francois Baril, a former Nokia executive, as well as by HMD management. The company said it would get funds from investors and from the profits of the acquired feature phone business.

As part of the same deal Microsoft is selling remaining feature phone business assets, including a manufacturing facility in Hanoi, Vietnam, and global distribution and supply chain networks to FIH Mobile Ltd., a subsidiary of Hon Hai Precision Industries (trading as Foxconn Technology Group).