Nokia, Microsoft set to close deal but with changes

Nokia, Microsoft set to close deal but with changes

22 APR 2014

Nokia expects the €5.4 billion sale of substantially all of its Devices & Services business to Microsoft to close on 25 April but said a major manufacturing site in India, which is at the centre of a dispute with the country’s tax authorities, might be excluded from the deal.

If the deal does close this Friday then it will be one month behind the original plan for an end-Q1 close.

Separately, Microsoft announced that certain assets are being added, or dropped, from the deal.

The Finnish vendor acknowledged uncertainty around inclusion of the Chennai facility in the deal. It said “there is still time before the closing of the deal” and “it is worth remembering that we have said we will consider a services agreement with Microsoft should our Indian assets not be able to transfer at the close of the global deal”.

Closing of the deal had been waiting on regulatory approval from China. The Finnish vendor has previously said tax proceedings in India would not slow up its progress.

Meanwhile Microsoft has said the two companies have agreed to some last-minute adjustments. It specified three:

The original deal did not address the management of online assets. The two companies have now agreed that Microsoft will manage the nokia.com domain and social media sites for up to a year.

Secondly, the original deal had all employees in Nokia’s chief technology office continuing with the company. The agreement has been adjusted so the 21 employees in China working on mobile phones will join Microsoft and continue their work.

Finally, the original deal had Microsoft acquiring Nokia’s Korean manufacturing facility. Microsoft will not now acquire the facility.

The Financial Times reported the plant, which employs 200 staff, could be closed by Nokia. Microsoft requested the change due to excess manufacturing capacity.

And a leaked memo has Microsoft changing the name of Nokia post-acquisition to Microsoft Mobile.

“Please note that upon the close of the transaction between Microsoft and Nokia, the name of Nokia Corporation/Nokia Oyj will change to Microsoft Mobile Oy. Microsoft Mobile Oy is the legal entity name that should be used for VAT IDs and for the issuance of invoices,” said the Nokia memo.

The memo was first reported by NokiaPowerUser.

However, while the memo points to a company name change, it is unclear whether this also means dropping the Nokia brand in the marketplace.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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