Microsoft which has entered into an agreement to purchase Nokia’s Devices & Services business, which includes their smartphone and mobile phone businesses, their design team, manufacturing and assembly facilities around the world $7.2 billion, said that Stephen Elop will be coming back to Microsoft.

In a letter to the employees Microsoft’s CEO Steve Ballmer who is retiring in next 12 months said that Stephen Elop will be coming back to Microsoft, and he will lead an expanded Devices team, which includes all of our current Devices and Studios work and most of the teams coming over from Nokia, reporting to me.

Elop stepped down as Nokia CEO as part of the deal. Instead, he'll become the chief of Microsoft's devices and services business. This has given credence to the rumors he will take over as Micrisoft CEO when Ballmer retires.

CNN Canada has quoted Steve Ballmer as saying that Elop is a candidate to replace him after he retires within the next year.

Ballmer said that  Julie Larson-Green will continue to run the Devices and Studios team, and will be focused on the big launches this fall including Xbox One and our Surface enhancements. Julie will be joining Stephen’s team once the acquisition closes, and will work with him to shape the new organization.

As part of the acquisition, a number of key engineering leaders will be joining Microsoft from Nokia, reporting to Stephen in his new capacity. Jo Harlow will continue to lead the Smart Devices team while Timo Toikkanen, will continue to lead the Mobile Phones team. Stefan Pannenbecker, will lead Design and Juha Putkiranta, will lead the integration effort on Nokia’s behalf.

Regarding the sales team, Ballmer said that Microsoft plans to keep the Nokia field team, led by Chris Weber, intact and as the nexus of the devices sales effort, so that it can continue to build sales momentum. After the deal closes, Chris and his team will be placed under Kevin Turner.