Nokia-Microsoft asset deal gets Chinese regulator's approval

Fate of Chennai factory remains uncertain

Even as Finnish mobile maker Nokia continues to face regulatory hurdles over transfer of assets to Microsoft as part of Euro 5.44-billion deal in India, the company has received a nod from the Chinese regulator. With this, the Nokia-Microsoft deal, globally, is heading towards a final closure.

On Tuesday, Nokia said it received regulatory approval from the Ministry of Commerce of China. Nokia plans to sell substantially all of its devices and services business to Microsoft.  

Nokia and Microsoft have now received regulatory approvals from China, the European Commission, the US Department of Justice and numerous other jurisdictions. Nokia and Microsoft continue to expect the transaction to close in April, 2014.

Earlier, the company said the deal, which was expected to close in March, would be delayed by a month due to pending approvals from Asian regulators. However, the mobile maker reiterated that ongoing tax proceedings in India had no bearing on the timing of the closing or on the material deal terms of the anticipated transaction. The regulatory approval process has involved a thorough review of Nokia’s patent licensing practices by several competition authorities around the world. During the process, no authority has challenged Nokia’s compliance with its FRAND (fair, reasonable and non-discriminatory) undertakings related to standard, essential patents or requested the company to make changes in its licensing programmes or royalty terms.

Nokia’s Sriperumbudur unit employs around 8,000 people directly (60 per cent of them are women), and 21,000 indirectly.

The company is fighting a case after the tax department slapped a penalty of Rs 21,000 crore for alleged tax evasion. Recently, the Tamil Nadu government issued a Rs 2,400-crore tax notice to the company.
CLEARING ROAD AHEAD

• Regulatory approvals have now been received from China, the European Commission, the US Department of Justice and numerous other jurisdictions
• Earlier, Nokia had said the deal, expected to close in March, would be delayed by a month due to pending approvals from Asian regulators
• The regulatory approval process has involved a thorough review of Nokia’s patent licensing practices by various global competition authorities
• No authority has challenged Nokia’s compliance with its fair, reasonable and non-discriminatory undertakings related to standard, essential patents or requested the company to make changes in its licensing programmes or royalty terms