MICROSOFT'S REQUEST DELAYED

Peter Suciu for redOrbit.com – Your
Universe Online
While it sounded like a “done deal,” Nokia
has delayed the sale of its smartphone
business to tech giant Microsoft until April
after reports on Monday stated that Nokia
had still not received approvals from certain
antitrust authorities in Asia.
Last September, Microsoft announced its
plans to acquire Nokia’s Devices & Services
business, which included the smartphone and
mobile phone parts of the Finnish-based
handset maker, for more than $7 billion. The
deal also reportedly included a number of
licensing agreements and patents by Nokia to
Microsoft. The deal was expected to close by
the end of the first quarter of this year.
On Sunday Brad Smith, general counsel and
executive vice president for legal and
corporate affairs at Microsoft issued a
statement via the company’s TechNet Blog .
“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.
Currently, we are awaiting approval
confirmation in the final markets. This work
has been progressing, and we expect to close
next month, in April 2014,” Smith wrote. He
added, “The completion of this acquisition will
mark the first step to bring Microsoft and the
Nokia Devices and Services business together.
Our acquisition will accelerate our mobile-
first, cloud-first imperatives. We’re looking
forward to accelerating innovation and market
adoption for Windows Phones and introducing
the next billion customers to Microsoft
services via Nokia mobile phones.”
The companies had received the thumbs up
from regulators in the United States late last
year. In December the Federal Trade
Commission (FCC) signed off on Microsoft’s
proposed acquisition of Nokia’s mobile
devices and services business, following
approval by the United States Department of
Justice.
However, on Monday the Wall Street Journal
reported that authorities in China hadn’t
signed off on the plan. However, sources told
the newspaper that both companies remain
optimistic about the new timetable. There is
also an outstanding issue of high-profile tax
disputes in India that need to be factored in
before the deal may close, but Nokia has
reiterated that its tax dispute in India would
not have an impact on the deal schedule.
This dispute was over unpaid sales tax on
phones made at the factory in the state of
Tamil Nadu. Nokia has contested the claim by
authorities in that state at the local High
Court, stating that no sales tax should be
levied on exported products.
Indian authorities have otherwise approved
of the acquisition. PC World reported that
the Competition Commission of India had
approved the deal in October, “as it found
that the combination of the two companies
will not likely have an ‘appreciable adverse
effect’ on competition in the country.”
In addition, the WSJ reported that this new
timetable could delay Nokia’s planned
announcement for its new strategy and how it
will compete in the wireless networks
industry. Nokia is expected to announce its
new strategic changes as well as a new chief
executive in the coming days. Nokia’s
chairman is acting as chief executive, while
outgoing chief Stephen Elop is heading to
Microsoft.
Elop will head up Microsoft’s expanding
hardware business and report to the
company’s new chief executive Satya Nadella.
Reuters also reported that other tech firms –
including Google and Samsung Electronics –
have asked the Chinese regulators to ensure
that the deal would not lead to higher
licensing fees.
While this may not stop the deal, Reuters
reported that even a delay could be a
problem for the firms.
“(The delay) is a bad sign. They have been
discussing with authorities for quite a while
already, and they still need more time,”
Nordea Markets analyst Sami Sarkamies told
Reuters on Monday. “The biggest risk is in
the upside of their patents. It looks like
Nokia will have to make bigger concessions to
push the deal through.”
The two companies had been close partners
since February 2011, when Nokia agreed to
focus its attention on creating mobile devices
for the Windows Phone platform.
Source: Peter Suciu for redOrbit.com - Your
Universe Online
Topics: Business Finance, Technology
Internet , Technology , Computing ,
smartphones , Nokia Delayed, Windows
Phone , Microsoft , Stephen Elop, electronics ,
Nokia

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