Nokia starts new chapter as shareholders approve Microsoft deal

Nokia said its shareholders approved the sale of the Finnish company's devices and services business to Microsoft after 99 per cent of the votes cast at this week's extraordinary general meeting were in favour of the proposal.


The move brings to an end a process that began in September when Microsoft said it would pay around €5.46 billion ($7.34 billion) for Nokia's mobile phones business and a licence to use its patents and mapping software. That bid was also seen by many as the inevitable conclusion of a series of events that started in 2010 with the appointment of former Microsoft executive Stephen Elop as CEO of the Finnish mobile device manufacturer.

According to Nokia Chairman and interim CEO Risto Siilasmaa, the vote brings the company closer to completing a transaction that will mark the beginning of the next chapter in Nokia's near 150-year history. "Continuing our existing strategy would have resulted in great difficulties," Siilasmaa told investors, according to Bloomberg. "We have no doubt that this is the right decision."

The transaction is expected to close in the first quarter of 2014, subject to regulatory approvals and other customary closing conditions, Nokia added.

"I think it's a fair price if you think about the situation right now," shareholder Matti Pirkola told Reuters. "I think Nokia could have chosen another option a few years ago, but now there are no other alternatives," he said.

At the same time, Reuters noted that Nokia shareholders used the meeting to express their frustration with the company's management, as the sale to Microsoft represents the loss of a major cornerstone of Finland's economy, Finnish media described Elop as a "Trojan horse" who ended up selling the devices unit to Microsoft for "peanuts" after the deal was first announced in September.

Further salt was rubbed into the wound by reports that Elop would receive a termination fee of €18.8 million ($25.3 million), while Elop is reportedly on the shortlist of candidates to replace Steve Ballmer, the outgoing CEO of Microsoft.

Following the vote on Tuesday, Reuters reported that hundreds of Chinese workers protested again the move on Wednesday as they said they had been forced to sign new contracts with worse employment terms.

For Nokia, its future now lies in Nokia Solutions and Networks, which provides network equipment to carriers; HERE, which sells mapping and location services; and the new Advanced Technologies, which Nokia said "will explore new business opportunities through advanced research, development and concept products in areas such as connectivity, sensing and material technologies, as well as web and cloud technologies." Nokia also said Advanced Technologies will handle the company's patent portfolio.

Nokia is not considering a deal between the company's Nokia Solutions and Networks (NSN) unit and rival Alcatel-Lucent after gauging the possibilities for a transaction, according to a Wall Street Journal report, which cited unnamed sources. Nokia and Alcatel-Lucent declined to comment on the report.

For more:
- see this Reuters article
- see this separate Reuters article
- see this Bloomberg article
- see this third Reuters article

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