An era comes to end!! Nokia-Microsoft deal has been closed officially today and Nokia Devices & Services division has been renamed by Microsoft as Microsoft Mobile. ( We told you so ). Some important changes from the time the deal has been announced are covered in Nokia’s press release.
Nokia will get more than EUR 5.44 billion, the original deal amount due to some final adjustments.
As earlier communicated, the transaction was subject to potential purchase price adjustments. The estimate of the adjustments made for net working capital and cash earnings was slightly positive for Nokia, and we currently expect the total transaction price to be slightly higher than the earlier-announced transaction price of EUR 5.44 billion after the final adjustments are made based on the verified closing balance sheet.
Both Korean and Chennai plants are left out of the deal but will have no impact on deal terms and rather it looks like that Nokia may gain some more, as the press statement says “Nokia will be materially compensated for any retained liabilities”. Nokia and Microsoft have entered into a service agreement whereby Nokia would produce mobile devices for Microsoft.
Additionally, as is customary for transactions of this size, scale and complexity, Nokia and Microsoft made certain adjustments to the scope of the assets originally planned to transfer. These adjustments included Nokia’s manufacturing facilities in Chennai in India and Masan in the Republic of Korea not transferring to Microsoft. These adjustments have no impact on the material deal terms of the transaction and Nokia will be materially compensated for any retained liabilities.
In India, our manufacturing facility is subject to an asset freeze by the Indian tax authorities as a result of ongoing tax proceedings. Consequently, the facility remains part of Nokia following the closing of the transaction. Nokia and Microsoft have entered into a service agreement whereby Nokia would produce mobile devices for Microsoft.
In Korea, Nokia and Microsoft agreed to exclude the Masan facility from the scope of the transaction. Nokia will now take steps to close the facility, which employs approximately 200 people.
Nokia will compensate and help employees affected due to closure of Korean plant and uncertainty over Chennai plant under its Bridge program.
Amid the uncertainty for our employees in Chennai and because of the planned closure of our facility in Masan, Nokia plans to offer a program of support, including financial assistance which would give our employees the chance to explore opportunities outside Nokia starting from a sound financial base. The company plans to bring to Chennai and Masan elements of its Bridge program, which we have made available for employees affected by company changes in other sites.