After much ado, it seems that Nokia and Microsoft will finally be able to close their deal. On Tuesday, China finally approved Microsoft's purchase of Nokia's devices and services division. Nokia stated that the deal should close very soon now that China has given Microsoft the green light.
The Microsoft-Nokia deal was supposed to close on March 31, but delays in Asia caused the companies to miss the deadline. In March, China renewed its concern that the deal placed too much power in Microsoft's hands because it included rights to Nokia's massive patent portfolio. The European Union had expressed similar concerns shortly after the deal was first announced, but now all these concerns have been allayed.
Although the deal still faces an uphill battle in India, where regulators want to tax the Nokia Lumia devices that are manufactured at the Chennai plant, those proceedings will not reportedly delay the Micrososft-Nokia deal further. In fact, Nokia stated that the deal should be finalized before the end of the month.
The $7.2 billion deal includes Nokia's devices and services division, for which Microsoft will pay €3.79 billion or $5.2 billion. Microsoft will also pay €1.65 billion or $2.18 billion for permission to license Nokia's patents. The merger is the logical conclusion to the growth of a strong partnership between Nokia and Microsoft, which started to become very profitable for both parties with the advent of Windows Phone 8.
Ever since Nokia went all out with the Lumia smartphone line-up, its fortunes have changed from dire, to decent, though still troubled. The Lumia line-up is very popular in South America, Central America and parts of Europe. It is even gaining traction in the United States. Nokia's success has also been the key to the success of Microsoft's Windows Phone operating system, which has now overtaken BlackBerry as the third most popular OS in the world.
By September of last year, it was no surprise when Microsoft announced that it would buy up Nokia's devices and services business. The progression from mutually beneficial partnership to merger was quite logical. It will be interesting to see how the deal shapes up once it becomes official. Will Microsoft make big changes or stick with what works? Will it kill off the Android-based Nokia Lumia X or keep it around? Only time will tell.
