Microsoft and Nokia’s $ 7.2 billion deal is now complete. By this, Microsoft takes up Nokia’s devices and services - the transaction news was confirmed by Nokia at a press release.
Nokia expects a little higher final price tag to be given, than when the deal was initiated last September, saying transaction was subject potential to purchase price adjustments.
The adjustments estimate for net working capital and Nokia’s cash earnings were slightly positive, and it can be expected that the final deal made in September for total transaction price to go high as earlier announced price was of EUR 5.44 billion, after the adjustments and verification of final closing balance sheet.
Nokia’s manufacturing units in Chennai, India and Masan, Korea are not to be transferred to Microsoft. Nokia is facing ongoing tax proceeding from India which were holding up the deal, so thereby Nokia has entered in the service agreement with Microsoft, which will produce mobile devices for Microsoft. Making it clear, Nokia is not getting out of mobile making technically.
It is released by Nokia that the Korean unit will shut down, making loss of 200 jobs.
With curtains down for the Korean unit, Nokia plans for its employees to give chance for employment outside Nokia, starting from a sound financial base. The company plans to bring the elements of Chennai and Masan to its Bridge program, which have been made available to its employees affected by the company changes in other new sites.
There has been a delay in the closure of transaction because of the regulatory hold ups (presumably the ongoing Indian factory related tax affair). The two companies were to close the deal in the first quarter, failing to the some pending approvals in certain markets.
Earlier this month in China the deal got a green light, whereas, Microsoft’s patent licensing practices after acquisition is concerned by the Chinese Ministry of Commerce. So the company had to agree to a list patent related commitments to get granted approval.
Tom Gibbons, Vice President of Microsoft corporate responsible for the Nokia integration, said completion of transaction would bring the best out of two entities, which were already working together since 2011 on Windows Phones.
Gibbons further added that the users will see the best out of two products in both Smartphones and Feature phones and users will have good experience while the gadgets will have very enjoyable and very comprehensive solutions.
As the deal is closed, Microsoft has acquired Nokia’s business of Smartphone and mobile phone, its design team, and most of the manufacturing and assembly facilities and operation, including sales and marketing support. Meanwhile, it’s also confirmed that Nokia will be renamed as Microsoft Mobile Oy for business purpose, but the brand name “Nokia” could prevail, according to the sources.
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