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Rahul Chattaraj
Rahul Chattaraj
Articles (59) 

Nokia-Microsoft Deal Not to Close Before April

March 25, 2014 | About:

It seems the much awaited Nokia (NOK) - Microsoft (MSFT) deal will have to wait for some more time and with this Microsoft’s efforts to enter the smartphone market will also have to wait. After falling from glory due to the poor choice of operating system, Nokia has seen some pretty tough times and finally the fortunes of the company can be expected to improve once it becomes a part of Microsoft. However, the deal which was announced in September last year, is now expected to close by April instead of the previous expectation of March.

While Nokia has already received required approvals from the US Department of Justice and the European Commission, certain Asian antitrust authorities are still in the process of completing their review and this is why the 5.4 billion euro worth deal has been delayed. According to sources close to the matter, the company is in its final stage of getting the approvals and once that’s ready, it can go ahead with the merger. Microsoft General Counsel and Executive VP (Legal & Corporate Affairs) Brad Smith wrote in a 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,”

Several industry experts and analysts are concerned over the delay since they were suspecting if Nokia’s tax disputed in India had to do anything with it. However, Nokia has again mentioned it clearly that the problems in India will not have any impact on the scheduled deal. If, by the time the deal is closed, the tax dispute is not resolved, the Chennai factory (the facility involved in the dispute) won’t be transferred to Microsoft for some time and will be operating as a contract manufacturer to the computer giant.

Microsoft is seriously looking forward to the deal as it will empower the company to venture into the smartphone space and compete directly with the existing players such as Apple (NASDAQ:AAPL), Samsung (SSNLF) and other Google (NASDAQ:GOOG) Android powered smartphones. After the acquisition, Microsoft will finally be able to launch its own smartphones powered by the Windows Phone OS and will not have to wait anymore for phone makers to come out with handsets. In the words of Smith,

"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,"

With this once can clearly understand how Microsoft intends to use the resources of Nokia. Apart from growing on the mobile handsets business, the computer giant also has multiple plans to invade the tablet market as well. The company has already entered the market with the Surface RT and Surface Pro devices. There are high chances that in the post-acquisition period, Microsoft will take a more aggressive stance both in case of smartphones and tablets. With so much going on and possibilities for much more, the wait seems to be worth it for the Windows maker.

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