Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) said Monday that the closing of the sale of its handset business to Microsoft Corporation (NASDAQ:MSFT) has been delayed. The Finnish company estimates the 5.4 billion euro ($7.2 billion) deal will close in April. The two companies had previously said that they expected to finalize the deal in the first quarter of 2014.
Asian antitrust regulators still reviewing Nokia-Microsoft deal
Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) said in a statement that the company has received approvals from the U.S. Department of Justice and the European Commission. But some antitrust regulators in Asia are still conducting their reviews. In a blog, Microsoft Corporation (NASDAQ:MSFT) EVP and general counsel Brad Smith said Sunday night that the deal will be closed next month. Smith added that the software giant has received approvals in 15 markets, and is awaiting approval in “final markets.”
Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) reiterated that the ongoing tax dispute in India won’t affect the deal schedule. Last week, Indian authorities issued a $414 million tax claim to Nokia after the Supreme Court of India ordered the Finnish company to give a $571 million guarantee before handing over its Chennai factory to Microsoft Corporation (NASDAQ:MSFT).
What will Nokia do with its Indian facility?
On March 21, Citi Research analyst Ehud Gelblum said in a research note that the tax dispute in India may push the close of the deal to April or May. The Finnish company may decide not to transfer its Chennai, India-based manufacturing facility to Microsoft Corporation (NASDAQ:MSFT) when selling its handset and services business. Citi Research believes that Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) is trying to figure out whether to shut down the Chennai plant and move production to Hanoi, Vietnam. Or Nokia may run the Indian factory as a contractor for the Redmond-based software giant.
The deal was announced in September 2013. The time frame is not exceptional for Microsoft Corporation (NASDAQ:MSFT), which took more than five months to complete the purchase of Skype in 2011.
Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) shares fell 0.14% to $7.16 in pre-market trading Monday.
