Nokia said its €5.4 billion ($7.4 billion) deal to sell its devices and services unit to Microsoft is now expected to close in April, missing the previous deadline of the first quarter of the year.
The Finnish company said most of the required regulatory approvals have already been received, including approvals from the European Commission and the U.S. Department of Justice. However, approvals from "certain antitrust authorities in Asia", which Nokia said are still conducting their reviews, are still missing.
Brad Smith, Microsoft's general counsel for legal and corporate affairs, wrote on the U.S. company's blog that the two companies are nearing the final stages of the global regulatory approval process and have received approvals from regulatory authorities in 15 markets on five continents.
"Currently, we are awaiting approval confirmation in the final markets. This work has been progressing, and we expect to close next month, in April 2014," Smith said.
At the same time, Nokia reiterated that the timing of the deal is in no way linked to ongoing tax proceedings in India. The company's comments came after it received a new tax demand from India, this time from the government of Tamil Nadu.
Nokia described the demand for around €300 million as "absurd", and said it has filed a writ to the Madras High Court to contest the claim. The latest demand arose after the Tamil Nadu tax department claimed that devices made in Chennai were not exported and were instead sold domestically in India, making them liable for sales tax.
"We contend that this allegation has no basis in reality whatsoever; it could easily be rebuffed by a check of documentation provided to various governmental departments including customs," said Nokia.
Nokia is already facing a recent order from India's Supreme Court to give a $571 million (€414 million) guarantee before transferring its Chennai factory to Microsoft.
If the India proceedings are not holding up the Nokia deal with Microsoft, what is?
Some analysts have raised concerns that the delay means Nokia will have to make concessions on patent licensing fees: the Finnish company will retain ownership of its patents after the deal closes.
According to Bloomberg, rivals such as Huawei and Samsung have expressed concern to China that the deal may result in higher patent licensing fees.
Nokia is also expected to unveil its new strategy once the sale of its devices unit has gone through. The company said on Monday that Finnish regulators have allowed it to postpone the publication of its financial statements and the board's annual review for the year 2013 until the end of April 2014.
For more:
- see this Nokia release
- see this Microsoft post
- see this Reuters article
- see this Bloomberg article
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