Nokia Corporation (NYSE:NOK) announced Monday that the sale of its mobile-phone division to Microsoft Corp. (NASDAQ:MSFT) for $7.5 billion will be delayed until April as Asian regulators are still reviewing the mammoth deal.
The Espoo, Finland-based smartphone manufacturer, which previously expected the deal to close in March after the transaction received most regulatory approvals, including from the European Commission and the U.S. Department of Justice, said that the transaction is yet to be approved by some anti-trust authorities in Asia.
“Nokia today announced that it now expects the transaction whereby the company will sell substantially all of its Devices & Services business and license its patents to Microsoft to close in April 2014,” the company said in a statement. “Nokia reiterates that ongoing tax proceedings in India have no bearing on the timing of the closing or the material deal terms of the anticipated transaction between Nokia and Microsoft.”
India's Supreme Court recently ordered Nokia to provide a guarantee worth 35 billion Indian rupees ($576 million) and waive some of its rights to legal defense before it transfers its plant in the southern Indian city of Chennai to Microsoft, Reuters reported. The company was handed a tax bill worth 300 million euros ($414 million) by the southern Indian state of Tamil Nadu (where Chennai is located), which the company called "absurd" and "completely without merit," and maintained that the issue would not hamper its deal with Microsoft, Reuters reported Friday.
Bloomberg reported that rival mobile-phone makers, including Huawei and Samsung Electronics Co., Ltd. (KRX:005935), have expressed concern to the Chinese government that the deal between Microsoft and Nokia could lead to higher patent-licensing fees. And, according to the report, China’s Ministry of Commerce is conducting an anti-monopoly review and is expected to approve the deal.
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Meanwhile, Nokia has been allowed by the Finnish Financial Supervisory Authority to postpone the publication of its financial statements and board's annual review for 2013 until the end of April. According to the company, it applied for the exemption mainly to enhance the possibility of being able to reflect the closing of the deal with Microsoft.
Microsoft also said, in a blog post, that both the companies are nearing the final stages of the global regulatory approval process, with authorities in 15 markets on five continents already having approved the deal.
“The completion of this acquisition will mark the first step to bring Microsoft and the Nokia Devices and Services business together,” Microsoft said.