Microsoft Corp. (Nasdaq: MSFT) agreed to buy Nokia Oyj’s handset unit and license its patents for 5.44 billion euros ($7.2 billion), seeking to revive two smartphone businesses that have struggled for a half-decade to gain share against Apple Inc. and Google Inc.

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. 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 successor to CEO Steve Ballmer, who said last month he’d retire within 12 months.

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