Microsoft And Nokia Expect Their Vast $7.2B Deal To Close In April.
It seems that Nokia has delayed the sale of its smartphone business to Microsoft until April, as they have still not received any approvals from certain antitrust authorities Asia.
During the last September, Microsoft has announced its plans to acquire Nokia’s Devices & Services business, which includes smartphones and mobile phone business, for an amount of$7 billion. This deal would also include the licensing of patent by Nokia to Microsoft, and had originally been expected to be closed during the first quarter of the year.
On Monday, Nokia commented that the deal has already received mot of the necessary regulatory approvals, which include approvals form the European Commission and U.S Department of Justice. The two companies have continued to make very good progress related the closing conditions and integration plans, Nokia said.
“We are nearing the final stages of our global regulatory approval process—to date we have received approvals from regulatory authorities in 15 markets on five continents,” wrote Microsoft’s general counsel Brad Smith in a blog post announcing the delay in closure of the transaction.
A Nokia spokeswoman from India declined to name which countries both Nokia and Microsoft still needed their antitrust clearance, China has of yet to approve the deal, according to various sources. The Competition Commission of India had approved of the deal last October, as it found the combined forces of the two companies would most likely not have any “appreciable adverse effect” with competition within the country. Although, Nokia’s handset factor based in Chennai in south India has been recently frozen by Indian federal authorities in a dispute over taxes for mobile phone software licenses.
The company is facing another dispute on about unpaid sales taxes of phone created at the factory from the authorities in the state of Tamil Nadu, where the factory is currently based, Nokia has managed to contest the claim in local High Court, stating that no sales taxes can be levied on exported products. The state government has claimed that the devices created in the factory were not exported but were sold domestically instead.
Nokia has commented that this delay in closure of the transaction are not linked to the tax issues in India and it will not be affected that deal terms. The Chennai factory will not be included during the transfer to Microsoft for a certain amount of time if the issue has not been resolved before the deal has been closed, and will operate as a contract manufacturer to Microsoft, source said.
Microsoft said last year it would submit the proposed acquisition for approval in the E.U., U.S., China, India, Brazil, Russia, Canada and other countries.