Barnes & Noble to buy Microsoft's 17% stake in Nook e-reader unit
05 December 2014
Barnes & Noble Inc, the largest US bookstore chain, yesterday said it would buy Microsoft Corp's 17-per cent stake in its Nook e-reader unit.
Barnes & Noble did not reveal the financial terms of the transaction, but several media reports suggested that Barnes & Noble bought Microsoft's stake in Nook for about $120 million in cash and stock.
Microsoft invested $300 million in Nook in 2012 in return for a 17-per cent stake. Under the deal, Microsoft would invest the money over a period of five years and in return, Barnes & Noble would create e-reading apps for new computers, phone and tablets powered by Microsoft's Windows software.
But since then Nook, has struggled and Barnes & Noble slowed work on developing its e-reading devices and tablets after sales slumped.
It recently ended working on Nook devices and signed a deal with South Korea's Samsung to sell its tablets co-branded with Nook, while Microsoft started making its own Windows tablets and smartphones.
Barnes & Noble had filed a Form 8-K with the US Securities and Exchange Commission stating that it and Microsoft have agreed to terminate their commercial agreement including any associated obligations for international content acquisition and sale.
The termination also relieves Microsoft of any obligation to continue to provide fund support and other payments outlined in the commercial agreement between both companies.
Barnes & Noble had in June announced that it plans to spin off itd Nook business and could now also think of selling this division.
New York-based Barnes & Noble, a Fortune 500 company, operates 658 bookstores in 50 states in the US, and one of the Web's largest e-commerce sites, BN.com, while Barnes & Noble College Booksellers operates 714 bookstores serving over five million students and faculty members at colleges and universities across the US.
The bookseller also operates Nook, one of the web's largest e-commerce sites, which features more than two million titles for its electronic reader, Nook Bookstore.