US software giant Microsoft, on Friday, completed the acquisition of Nokia's mobile handset business, while excluding the Finnish firm's Chennai factory from the over USD 7.2 billion deal due to tax issues, Reports, PTI.

The Chennai plant will make phones only for Microsoft and not for other phone makers. The details of the terms of manufacturing agreement were not revealed.

The acquisition has been approved by Nokia shareholders and by governmental regulatory agencies around the world, said a Microsoft release, adding that completion of the acquisition marks the first step in bringing these two companies together as a team.

Former Nokia President and CEO Stephen Elop will directly report to Nadella and will serve as executive VP of the Microsoft Devices Group, overseeing development and progress of the Lumia range and other Nokia phones, Xbox hardware, Surface PCs and Perceptive Pixel (PPI) products.

The Chennai factory started in 2006, it employs about 8,000 workers which is equivalent to about a third of Nokia's 25,000 staff that are being transferred to Microsoft.

“Today we welcome the Nokia Devices and Services business to our family. The mobile capabilities and assets they bring will advance our transformation,” said Microsoft CEO Satya Nadella.

In March, the Tamil Nadu government served a Rs. 2,400 crore notice on Nokia, saying the firm sold products from the Chennai plant in the domestic market instead of shipping them overseas.

In a separate tax case, the Supreme Court ordered Nokia India on March 14 to give a Rs. 3,500 crore guarantee before it transfers the plant to Microsoft.