Nokia said it expects to close the sale of its Here navigation business to a consortium of auto makers ahead of schedule, in an announcement made a day after its shareholders gave the green light to its planned merger with Alcatel-Lucent.
The completion of the Here sale to a consortium comprising Audi, BMW and Daimler was originally scheduled to close during the first quarter of 2016. However, Nokia said it now expects the transaction to close on Friday after it received all required regulatory approvals for the sale.
Nokia agreed to sell Here to the consortium of German auto makers for €2.8 billion ($3 billion) in August. At the time it noted that it would receive net proceeds of just over €2.5 billion when the deal was completed, and that it would book a gain on the sale totalling approximately €1 billion. The implication of closing the deal early is that the gain will now be booked in the company's fourth-quarter earnings.
When the deal was announced, Nokia's president and CEO Rajeev Suri said the company believed the sale "is the best path forward for our shareholders, as well as the customers and employees of Here."
Suri also noted that agreeing the sale left Nokia clear to "focus on our planned combination with Alcatel-Lucent."
Nokia overcame the final hurdle to that merger this week, when its shareholders gave the deal the thumbs up at an EGM on Dec. 2. Shareholders gave near unanimous approval, with 99.49 per cent voting in favour of the move.
In a statement announcing the outcome of the EGM, Nokia noted that its shareholders "overwhelmingly expressed their support for the proposed acquisition of Alcatel-Lucent," and that it expects to complete the process in the opening quarter of 2016.
Risto Siilasmaa, chairman Nokia's board of directors, said shareholders had "endorsed our strongly held belief that the combined company will be better positioned to compete as a world leader in network technologies over the long-term."
Suri called for Alcatel-Lucent's shareholders and convertible bondholders to follow suit "by tendering their securities into the public exchange offer." In doing so, Alcatel-Lucent's stakeholders "would play an important role in helping to create a new leader in next generation technology and services for an IP connected world," he said.
In a related statement, Alcatel-Lucent welcomed the decision and announced its board of directors had decided to waive some lock-up restrictions to smooth the progress of the deal.
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