The Nokia-Microsoft deal that was slated for closure at the end of this month will be delayed pending approvals from competition authorities.
According to The Wall Street Journal, competition authorities in Asia, notably the Chinese authorities, have yet to give their nod to the deal. However, both Microsoft and Nokia are satisfied with the progress the deal has made and are optimistic about its further progress, WSJ said.
According to the NY Times, Brad Smith, Microsoft's general counsel, wrote in a blog post, "We are nearing the final stages of our global regulatory approval process. We are awaiting approval confirmation in the final markets."
The European Commission and the US Department of Justice gave their approvals to the $7.2 billion deal that was struck last September. But with pending approvals from Asian authorities, the deal is unlikely to be closed by April, CNET reported.
WSJ also pointed to tax disputes in India, which could be contributing to the delay. Last week, the Finnish mobile manufacturer received a $400 million tax bill from the Indian state of Tamil Nadu where one of its biggest manufacturing plants is located. The High Court of the state asked Nokia to provide a $571 million guarantee before transfering the manufacturing in Tamil Nadu's capital city of Chennai to Microsoft.
The Tamil Nadu tax department has maintained that Nokia has been selling phones meant for export within India, thus attracting tax duty.
According to Reuters the delay could force Nokia to make patent concessions when pushing the deal through.
"The delay is a bad sign. They have been discussing with authorities for quite a while already, and they still need more time. The biggest risk is in the upside of their patents. It looks like Nokia will have to make bigger concessions to push the deal through" said Nordea Markets analyst Sami Sarkamies said.
