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Microsoft-Nokia agreement involved MS buying Nokia’s shares & was only changed later to assets deal.

[embedit snippet=”fluids”]MS Nokia

A surprising revelation in a recent report by Financial Times, which covers Nokia’s tax woes in India draws one’s attention. It seems, Nokia-MS deal initially was set to “Microsoft buying Nokia corp’s equity shares and become a shareholder in the company”. It was only amended later to purchase of Nokia’s  assets only. This, as per comments by Indian Tax authority (ACIT) may be a “convenient coincidence and is an internal collusive agreement”.

The ACIT has also drawn attention to the fact that the Microsoft-Nokia agreement has undergone two amendments without there being any independent valuation of assets by a third party. “The decision of Microsoft Corporation to not purchase equity shares of Nokia Corporation and to purchase its assets only which are already attached by the department is a convenient coincidence and is an internal collusive agreement”, the ACIT in its application said.

Now, we can’t be sure that Nokia India tax issue may prompt a change in terms of agreement between two global corporations, but it is very interesting nonetheless. Imagine a situation, where Nokia’s D&S division could have still existed with Nokia, after the deal and MS may have been supporting it from outside as a shareholder. Though, this could have compromised the “independent Nokia” that we are seeing now.

But, as a Nokia fan I could have loved to see Nokia still owning its D&S division and in an equity partnership with Microsoft. The proceedings from such deal could have helped Nokia financially as well.

Thanks TS for the tip. Cheers!!

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Source: FT

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Nayan

Nayan has more than 10 years of experience of covering Technology and innovations. He is a big Nokia fan and Tech disruptions aficionado. He loves to review new cool gadgets and writing about Android, iOS, Gadgets and general Technology stuff. He has been associated with other well-known Tech sites WinCentral and GadgetOx since long.

He currently sports a Lumia 950 XL and Nexus 5X. Other interests include listening to Nu-Metal Hits and Kick-Boxing.
Write to him at Email: [email protected]

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  • sid

    Regarding the indian tax extortion scheme, all I can say is…thank god nokia india is (1) a separate corporate entity for which the mother corporation does NOT owe any liabilities, taxes or otherwise, and (2) good thing India unfroze nokia india’s bank accts long enough for the indian sub to repatriate as dividends pretty much all of its existing cash, about 650M USD to the parent this past quarter. The Chennai plant itself cost Nokia 150M USD from past reports.

    Nokia will BK the sub, and the Indians can try to sell that plant for scrap metal. I think this was why nokia set up the Vietnam plant. India is turning into the next Venezuela.

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