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Microsoft-Nokia Merger Hits a Speed Bump in India

by Jacob Kleinman | March 14, 2014March 14, 2014 6:00 pm PDT


Microsoft’s plan to acquire Nokia’s device business faced its biggest hurdle yet after India’s supreme court rejected a plan to transfer one of the Finnish company’s largest factories over to its new owner earlier today. The court reportedly ordered Nokia to give a financial guarantee of 35 billion rupees (roughly $500,000) before transferring the plant and a handful of other assets in the country over to Microsoft.

It’s unclear what will happen if Nokia is unable to transfer the factory over to Microsoft as part of their planned $7.16 billion deal. It’s possible Nokia could run the factory for Microsoft as a contractor, though not indefinitely. The company could also potentially shut the factory down entirely, though that would mean firing 8,000 employees and likely getting less money than originally planned from Microsoft. Nokia responded to the verdict with a public statement clearly expressing its disappointment.

“Nokia is disappointed by today’s decision,” the statement read. “The company strongly believes its offer to the Indian tax department is fair for all sides, allowing its employees and assets to transfer to Microsoft while also providing the necessary financial guarantees. Nokia regrets the anxiety this extended legal process has caused its employees.”

This isn’t the first time the massive Nokia-Microsoft deal has hit a snag. The merger faced some opposition in China late last year as Chinese competitors worried it would mean anti-trust violations and increased patent fees for Android phone-makers. The deal is still expected to go through though, even if the final agreement isn’t exactly the same as the one the two companies originally agreed to.

Reuters TechCrunch

Jacob Kleinman

Jacob Kleinman has been working as a journalist online and in print since he arrived at Wesleyan University in 2007. After graduating, he took a...