Boston, MA 04/24/2014 (wallstreetpr) – Nokia Corporation (ADR) (NYSE:NOK), a Finnish communication and information technology corporation based in Finland and Microsoft Corporation (NASDAQ:MSFT), America’s multinational corporation based in Washington have signed a deal where Microsoft will take over Nokia’s mobile phones production division. Nokia provides various internet related telecommunication services along with equipment manufacturing. Microsoft a well-known brand name provides software and electronic goods and services.
Chinese Regulators approve the deal
The stated deal is set to be finalised by April 25, 2014. Microsoft will take the complete charge of Nokia’s handset manufacturing division. Microsoft is paying 5.4 billion euros to Nokia Corporation (ADR) (NYSE:NOK) under the deal. The term and agreement were already decided upon in the September 3, 2013.The deal had already been approved by EU and US Department of Justice, and the deal has now finally received a green signal from the Chinese regulators.This was the only reason behind the delay in the takeover process of the deal.
Impact on Nokia
Microsoft Mobile is the new name for the Nokia’s mobile division and it will cease to manufacture any smartphones after April 25.The deal will end the brand name Nokia from the mobile phones market. Also, Nokia’s two online assets; its domain name and social media sites will be managed and monitored by Microsoft Corporation (NASDAQ:MSFT) for the ease of customers. Nokia will continue its network equipment business. Nokia’s Chennai division might not be included as part of this deal owing to a tax dispute.
Gain to Microsoft
With this deal, Microsoft Corporation (NASDAQ:MSFT) can expand its brand value in smartphones. Moreover, Microsoft can use the brand name Nokia Corporation (ADR) (NYSE:NOK) for next 10 years for all the phones including Lumia and Asha for retaining the customer base trusting Nokia. It is expected that Microsoft will employ 32,000 of Nokia’s employees, with 21 employees from its China’s office. Presently, Microsoft phones face stiff competition from Samsung Electronics Co., Ltd. And Apple Inc. (NASDAQ:AAPL) phones.
