EU Approval Brings £4.6bn Microsoft Nokia Deal Closer To Completion

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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Nokia handset acquisition clears another regulatory hurdle and is expected to close early next year

Microsoft’s £4.6 billion acquisition of Nokia’s devices and services business has been approved by the European Commission (EC), which concluded the deal complies with EU merger regulations.

The EC says no competition concerns would be raised by the deal because there are only “modest overlaps” between Nokia and Microsoft’s existing activities, meaning it is unlikely the takeover will lead to competitors being shut out of the market.

Microsoft is deemed unlikely to restrict the availability of Windows Phone to other manufacturers because the platform needs market share to succeed, while it is also in the firm’s best interests to ensure Office, Skype and Exchange are available on as many devices as possible.

European approval

nokia microsoft Risto Siilasmaa Stgeve Ballmer September 2013In any case, the EC said there are a number of alternative office, VoIP and email services, so Microsoft would not benefit from any restrictive practices, while the presence of strong competitors in the handset market, such as Apple and Samsung, means competition will not be affected.

The EC’s blessing means the deal, first announced in September, has cleared one of the final regulatory hurdles preventing its completion, with the US Department of Justice granting its approval earlier this week.

The EC’s blessing means the deal has cleared one of the final regulatory hurdles it must face before it can be completed. Nokia shareholders approved to the deal at an Extraordinary General Meeting (EGM) in Helsinki last month, marking the end of the Finnish firm’s 30 year association with mobile phone manufacturing, while the US Department of Justice rubber-stamped the takeover earlier this week.

Microsoft Nokia

Nokia has so far received approvals from regulators in India, Israel, Russia and Turkey, and the company is seeking approval in 12 other countries. It expects the transaction to close in the first quarter of 2014.

The firm was the most successful smartphone maker from the beginning of the century until the arrival of Apple’s iPhone and Google’s Android wiped away its lead. More recently it joined Microsoft’s Windows Phone initiative in early 2011, becoming the most successful device manufacturer for that platform.

Microsoft will hope the acquisition of Nokia’s handset business will strengthen the mobile operating system whose share of the smartphone market is still small compared to iPhone and Android.

After selling its phone busienss, Nokia will be left with its Here Maps, advanced technology and network solutions businesses, with the firm’s most recent quarterly results offering positive signs to its future. Nokia posted sales figures of €5.7 billion (£4.9bn) in the second quarter of 2013, but €2.9 billion (£2.5bn), more than half, of this was generated by the divisions that Microsoft is not acquiring.

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