Nokia says Microsoft deal to be delayed a month
24 March 2014
Finnish handset maker Nokia today said its $7.2-billion deal with software giant Microsoft is likely be delayed by a month and would now be finalised by April due to pending regulatory approvals from some antitrust authorities in Asia.
The handset maker, faced with multiple tax cases in India, added that the timing of the deal would not be affected by the proceedings in the country the report said.
Nokia had announced in September last that it would sell a substantial part of its devices and services (D&S) business, including assets in India, to Microsoft for $7.2 billion by March 2014 (See: Microsoft to acquire Nokia's handset business for $7.1 bn).
It now expects the transaction whereby the company will sell substantially all of its D&S business and licence its patents to Microsoft to close in April 2014, Nokia said in a statement today.
The statement added that Nokia and Microsoft remained committed to the transaction.
It said the two companies had received most of the required regulatory approvals, including clearances from the European Commission and the US Department of Justice.
''However, the transaction is pending approvals from certain antitrust authorities in Asia, which are still conducting their reviews,'' Nokia said.
According to the handset giant it was confident the deal would close, resulting in the sale of substantially all of its D&S business to Microsoft.
According to analysts, the delay meant Nokia, which had expected to close the deal by the end of March, might have to make concessions over the licence fees it would charge on patents that would remain with the Finnish firm after closure of the deal.
According to media reports, earlier this month, Google and Samsung Electronics had asked Chinese regulators to ensure the €5.4-billion deal between Microsoft and Nokia would not lead to higher licencing fees.
Reuters quoted Sami Sarkamies, an analyst at Nordea Markets as saying the delay was a bad sign. He added, they had been discussing with authorities for quite a while already, and they still needed more time.
Sarkamies added, the biggest risk was in the upside of their patents. He said, it looked like Nokia would need to make bigger concessions to push the deal through.
The deal had already been approved by the European Commission and the US Department of Justice, but some antitrust authorities in Asia were still conducting their reviews, according to Nokia's statement.