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April 21, 2014 5:33 pm
Microsoft has confirmed the acquisition of Nokia’s handset business will complete on Friday although the US technology group also revealed a few changes to the original terms of the €5.4bn deal agreed last year.
Microsoft said on Monday it had completed the “steps necessary to finalise” the acquisition of the Nokia’s devices and services business.
The deal is now almost four weeks behind the original timetable set out in September, when Microsoft announced its intention to buy Nokia’s mobile phone business and license its patents for €5.4bn in cash.
The completion of the transaction, which was in part awaiting regulatory approval from China that was finally granted earlier this month, is now likely to go ahead without the transfer of a large phone production plant in India that has been included in a wider Nokia tax dispute.
Nokia said that there was “still time before the closing of the deal” so could not “speculate on possible outcomes”. It added: “With Chennai, 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.”
However, Microsoft confirmed it would not now acquire Nokia’s Korean manufacturing facility, which employs about 200 people, which had been part of the original terms of the deal. The plant, which manufactures phones, could now be closed by Nokia.
Nokia said: “Microsoft requested a change in the transaction due to excess capacity, and we have signed a joint agreement on this adjustment. As a result, our Korean employees and assets will not transfer to Microsoft. We are now evaluating our options.”
September 2013: Richard Milne reports from Salo, Finland, the birthplace of Nokia, to hear what locals and employees have been feeling about Microsoft’s takeover of Nokia’s mobile unit.
Nokia is expected to wait until next week when it releases its quarterly results to reveal the future strategy without its handset business as well as the management structure.
The Finnish group has been linked with the appointment of Rajeev Suri, head of Nokia Solutions and Networks, as the next chief executive in a business centred around the provision of telecoms infrastructure equipment and services.
A statement by Brad Smith, Microsoft’s general counsel, said that the acquisition would help the company accelerate innovation and market adoption for Windows Phones.
“As with any multinational agreement of this size, scale and complexity, our two companies have made adjustments to the original deal throughout the close preparation process,” he added.
Microsoft has also agreed to manage the nokia.com website and social media sites for customers for up to a year, although Nokia will take back control of the domain to maintain its brand in the future. In addition, 21 employees in China working on mobile phones will now join Microsoft.
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