China: Microsoft clears hurdle to acquire Nokia handset business

Microsoft and Nokia have finally cleared a major hurdle in their plan for Microsoft to acquire Nokia handset operations and a significant portion of its patent portfolio, but not without conditions, say reports.

China’s Ministry of Commerce has approved the deal after forcing the parties to delay their anticipated closure date; the companies had originally looked to finalize the deal in the first quarter of this year.

While China is notorious for taking longer than some of its international counterparts to review mergers, the acquisition earned criticism from Chinese handset rivals, including Lenovo and ZTE, that relayed those concerns to Mofcom.

The majority of the concern, reports say, have to do with how the transaction will affect Nokia’s patent licensing fees. Similarly, the European Commission received opposition to the deal on the grounds that it could entice Nokia to charge higher licensing fees.

But in a statement released Tuesday, Nokia said that “no authority has challenged Nokia’s compliance with its FRAND undertakings related to standard-essential patents…or requested that Nokia make changes to its licensing program or royalty terms.”

Still, Microsoft reportedly offered to Chinese regulators to license its standard-essential patents on FRANT terms in addition to making non-exclusive licenses available to Android phones.

While China’s approval of the deal means the companies have progressed towards completing the acquisition, Nokia is facing challenges in India with a tax dispute that had Indian regulators require a $573 million guarantee before one of its manufacturing plants in the nation could be transferred to Microsoft.

Full Content: NDZet

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