The Nokia-Microsoft Deal is Not Before April!
17
Apr 2009
The $7.3 billion deal between Nokia and Microsoft has been delayed till April, 2014. This deal involves the sale of Nokia’s mobile-phone unit to Microsoft. Nokia made this announcement at Helsinki on Monday. The reason for the delay is said to be the pending approval from Asian regulatory authorities. The deal has already been approved by E.U. and U.S. authorities.
This deal was initially announced in September, 2013. This $7.3 billion (5.4 billion Euros) was expected to get completed in the first quarter of 2014.
According to an announcement made by Nokia officials last week, the reason for the delay may be the pending decision of a case between Nokia and local authorities in Chennai, India. The dispute, as per the officials, is that the authorities want sales tax to be levied on the export of devices from the company’s plant situated at Chennai.
Nokia is a well-known company in the business of mobile phone development and has made quite a presence for itself despite the presence of formidable competitors like Samsung and Sony.
Financial pundits all over the world are putting forth their perceptions regarding the delay. Speculations are rife about the possibility that this deal may end in Microsoft losing Nokia’s key manufacturing plant based in India.
The Indian Supreme Court has ruled that Nokia must deposit an amount of $571 million into an Escrow account before Microsoft gets ownership of the manufacturing plant in Chennai. The reason for the delay may perhaps lie in Nokia’s and Microsoft’s respective plan-of-actions.
The plant may be shut down in case of non-payment. If this happens then Microsoft will lose a key manufacturing plant in India. Employees working in that Chennai factory will lose their jobs and this is certainly not a welcome proposition.
The month of April will give a clear picture as to the status of this financial deal.
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