Microsoft-Nokia Deal Receives Approval From European Commission

Microsoft-Nokia Deal Receives Approval From European Commission
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The transaction of Microsoft Corporation (NASDAQ:MSFT) to acquire the Devices and Services business of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) for €5.44 billion or $7.2 billion was approved by the European Commission.

Microsoft upstream activities in the mobile operating systems

The European Commission evaluated the vertical relationships between the activities of the combined company in the downstream market for smart mobile devices as well as Microsoft Corporation (NASDAQ:MSFT) upstream activities in the mobile operating systems (OS), mobile applications (apps), and enterprise mail server software and related communication protocols.

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Based on the evaluation, the commission found that Microsoft Corporation (NASDAQ:MSFT) is unlikely to restrict the supply of its Windows OS for smart mobile devices and mobile apps such as the Office suite app, Skype app to third party device manufacturers and/or competing service providers after the transaction.

The commission believed that Microsoft Corporation has no ability to the restrict the interoperability of its competitors with its enterprise mail server software (Exchange Server) because of the terms of their current license contracts to the patents of the company.

The European Commission concluded that Microsoft-Nokia deal will not raise any competition concerns because there are only minimal overlaps between the activities of the companies. Microsoft Corporation (NASDAQ:MSFT) was pleased with the decision of the commission.

DOJ approved Microsoft’s agreement with Nokia

Earlier this week, The United States Department of Justice (DOJ) approved Microsoft’s agreement with Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V). The shareholders of the Finnish smartphone manufacturer approved the deal last month. Microsoft expects to complete the transaction in the first quarter of 2014.

Microsoft’s CEO Steve Ballmer previously stated that acquiring the Devices and Services business of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) is a “bold step into the future.” According to him, the transaction is a win-win for employees, shareholders and consumers of both companies. He is confident that the acquisition will boost Microsoft’s share and profits in smartphones and strengthen its opportunities as well as its partners across its devices and services.

“Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution,” according to Ballmer’s previous statement.

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