Microsoft-Nokia deal delayed till April

Posted by: Jennifer Cefai (3 years, 6 months ago)

You can practically feel Steve Ballmer's wailing-and-gnashing-of-teeth, wherever you are. Nokia Corporation today announced that the $7.5 billion sale of its mobile-phone division to Microsoft Corp. will be delayed until April. While the European Commission and the U.S. Department of Justice have approved the move, Nokia has said that the transaction has yet to be OK'ed by a number of Asian anti-trust authorities. 

"Nokia today announced that it now expects the transaction whereby the company will sell substantially all its Devices & Services business and license its patents to Microsoft to close in April 2014," said the company, in a statement. "Nokia reiterates that ongoing tax proceedings in India have no bearing on the timing of the closing or the material deal terms of the anticipated transaction between Nokia and Microsoft."

The situation in Asia is as follows:

  • The Nokia plant in Chennai, Southern India cannot be transferred to Microsoft until Nokia provides a guarantee worth 35 billion Indian rupees ($576 million) and waives some of its rights to legal defense, as ordered by the Indian Supreme Court. This comes after the company was subject to a tax bill of $414 million, issued by the state Chennai is a part of. The company has referred to the tax bill as "absurd" and "completely without merit", and promised that it wouldn't affect the Microsoft deal.
  • Rival smartphone manufacturers Huawei and Samsung have apparently told the Chinese government that they are concerned that the deal will lead to higher patent-licensing fees. THis has resulted in the Chinese Ministry of Commerce ordering an anti-monopoly review before approving the deal.

Aside from this, the deal has been approved by authorities in 15 markets on five continents. The Finnish Financial Supervisory Authority has also allowed Nokia to postpone the publication of its financial statements and board's annual review for 2013 until the end of April, which gives the company enough breathing space to incorporate the deal with Microsoft in it. It is up to India and China from this point. 

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