Seeking Alpha

Microsoft-Nokia deal closing on Friday; terms slightly adjusted

  • Microsoft's (MSFT -0.5%) acquisition of Nokia's (NOK -0.1%) Devices & Services unit will close on April 25.
  • Three changes have been made to the original deal: 1) Microsoft won't acquire Nokia's Korean manufacturing facility. 2) Microsoft will "manage" Nokia.com and Nokia social media sites for up to a year. 3) 21 Chinese employees of Nokia's Chief Technology Office will join Microsoft.
  • Chinese government approval (provided two weeks ago) ended the last major regulatory hurdle for the deal, which was originally set to close in March. Nokia stands to reap a $7.5B cash windfall that it might direct towards a mixture of acquisitions - the company has said it's focusing on smaller deals - and capital returns.
  • Microsoft, meanwhile, will have to get to work on turning around a business that posted a 29% Y/Y sales drop and a -7.3% non-IFRS op. margin in Q4, in large part due to plunging feature phone sales.
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Comments (42)
  • Philip Marlowe
    , contributor
    Comments (1311) | Send Message
     
    http://bit.ly/1mvOxFw
    21 Apr 2014, 10:49 AM Reply Like
  • Timothy Bryan
    , contributor
    Comments (943) | Send Message
     
    No Korean facility? What about India?
    21 Apr 2014, 10:55 AM Reply Like
  • joshvegas
    , contributor
    Comments (435) | Send Message
     
    Finally after eight long months.
    New CEO appoitment and New Nokia is born:)
    21 Apr 2014, 10:56 AM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (2104) | Send Message
     
    MSFT not acquiring the Korean facility??? This does not seem to be a type since the original MSFT has it too...I would have expected Indian facility. So it sounds like that Nokia is now stuck with two biggest dumb phone factories, India and Korea. Very smart from MSFT to leave Korea to Nokia, but I am not happy as a Nokia long...
    21 Apr 2014, 10:56 AM Reply Like
  • joshvegas
    , contributor
    Comments (435) | Send Message
     
    And no impact on price of the deal..
    21 Apr 2014, 11:00 AM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (2104) | Send Message
     
    And what is this Korea factory. I got this confused with Vietnam one, which is the other big one besides India.

     

    I am thinking this must be typo and the MSFT legal counsel means India instead of Korea. I really hope so...
    21 Apr 2014, 11:01 AM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (2104) | Send Message
     
    Info on Korea facility here:
    http://seekingalpha.co...
    21 Apr 2014, 11:24 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10793) | Send Message
     
    Sepp

     

    Only has 200 employees.
    21 Apr 2014, 02:01 PM Reply Like
  • joshvegas
    , contributor
    Comments (435) | Send Message
     
    Interesting related to India - who will inheret all the problems? Who will have to finish all the talks etc? Nokia, Msft?
    22 Apr 2014, 03:32 AM Reply Like
  • Timothy Bryan
    , contributor
    Comments (943) | Send Message
     
    Seppo, I think Korea was jerking around MSFT, so they told them to shove it! God bless them!
    21 Apr 2014, 10:58 AM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (2104) | Send Message
     
    Oh, that could be it. Korean approval was still pending, and Samsung==Korean Gov was demanding too much from MSFT as concessions, so they left it to Nokia...to be shutdown like the India one :)
    21 Apr 2014, 11:03 AM Reply Like
  • sidiji
    , contributor
    Comments (228) | Send Message
     
    it wont be shut down seppo; unlike india there are no tax liens etc, the Koreans will approve deal after closing now that they see there's no point dragging it out that their blackmail attempt didn't work...and showing to the world how corrupt its regulators have become at Samsung's behest. The plant will be easily resold to msft after closing. Very well played by both nokia and msft here...Samsung and google just outclassed.
    21 Apr 2014, 12:00 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10793) | Send Message
     
    Diablo,

     

    "God bless them! " Really?
    21 Apr 2014, 02:01 PM Reply Like
  • Timothy Bryan
    , contributor
    Comments (943) | Send Message
     
    umm yeh :-)
    21 Apr 2014, 03:05 PM Reply Like
  • wiredless
    , contributor
    Comments (68) | Send Message
     
    HTC may now be interested in working a deal with $NOK re: India factory. Credit for mentioning this goes to SA member: im626 - passing it along. http://bit.ly/1mvISzh.
    21 Apr 2014, 11:10 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (3050) | Send Message
     
    It will be interesting to review these two corporations around Nov 1 to see how six months have treated the two companies. For Nokia it may show whether they will survive in the long term or turn into alcatel lucent a ghost of itself. For MSFT it should be a great opportunity however if they falter It may be the first step to the first computer software utility.
    21 Apr 2014, 11:15 AM Reply Like
  • wiredless
    , contributor
    Comments (68) | Send Message
     
    Should one trade or invest? This alone keeps my interest. My sense is that NOK is primed to be an integral part of "the internet of things". The "internet of people" is saturated, with ecosystems leveling off because of the economic constraints of the 5 billion without access. Still, network access is now available to almost 80% of the planet. Things need managing more than people. Nokia fits into this assumption well. With their long-valued, yet under-utilized IP, with a solid competitor for location based services (HERE) and with their network infrastructure group (NSN) targeting multiple levels of network investments, I believe this company is, on balance, better equipped to propel forward than fall backward.
    21 Apr 2014, 11:25 AM Reply Like
  • logic001
    , contributor
    Comments (140) | Send Message
     
    That could possibly be the case however not until they carry out a complete overhaul of their executive board.
    21 Apr 2014, 01:53 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10793) | Send Message
     
    Wire,

     

    You have a lot of reading to do.
    21 Apr 2014, 02:02 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (3050) | Send Message
     
    WIRELESS
    I would not at present invest in either company however I would and do trade MSFT daily. Management has not to my satisfaction proved itself.
    I want everybody to make money and good luck with Nokia
    21 Apr 2014, 02:06 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10793) | Send Message
     
    NYC

     

    Good advice and Nokia has been an excellent trade vehicle for the last 8 months.
    21 Apr 2014, 02:14 PM Reply Like
  • wil3714
    , contributor
    Comments (2135) | Send Message
     
    NYC

     

    Why trade MSFT intraday when you have no volatility?
    22 Apr 2014, 04:58 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (3050) | Send Message
     
    WIL3714
    On an average day the stock price spreads at least 55 cents that allows me to make 3 or 4 trades and make 100 to 300 daily. I do this with a few stocks. Most are traded in my Roths so I have no tax consequences and because I have a couple thousand shares in each stock, I'm not subject to reg T as I churn.
    22 Apr 2014, 08:54 AM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (2104) | Send Message
     
    @NYCT Nice! :)
    22 Apr 2014, 09:13 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10793) | Send Message
     
    NYC

     

    Still looking at those tradable Roths. Thanks for the information a few months ago.
    27 Apr 2014, 05:46 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (3050) | Send Message
     
    DWDALLAM

     

    Thanks for the comment and all the best
    27 Apr 2014, 08:39 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10793) | Send Message
     
    NYC

     

    Same to you :)
    28 Apr 2014, 07:15 PM Reply Like
  • samuel_liu
    , contributor
    Comments (2798) | Send Message
     
    Boy this has taken forever since 2010 or 11, was this JV first announced. In that time, Google has bought and is selling the Motorola phone division.

     

    Is it positive to be the sluggard?

     

    long: MSFT
    21 Apr 2014, 11:22 AM Reply Like
  • sidiji
    , contributor
    Comments (228) | Send Message
     
    Google's Motorola purchase is widely regarded as an epic failure and waste of money. They bought Motorola to bolster their IP to protect Android...turns out they have not managed to obtain a single injunctive win to date. Moreover the Motorola IP is so widely crosslicensed its virtually worthless and the fact that it is predominantly made up of SEP means Google cannot use injunctive relief under FRAND rules. Google bought the wrong company, they should have bought Nokia instead...now they will pay for their mistake. Nokia will go after Google and Android/Samsung next and these IP thieves know it, its why they tried so hard to subvert the regulatory approval process in china and korea...they failed, now they will pay
    21 Apr 2014, 12:29 PM Reply Like
  • samuel_liu
    , contributor
    Comments (2798) | Send Message
     
    sidiji:

     

    The ingenuity of Google dudes is simply amazing!

     

    Google got what it wanted and kept what was needed to stay ahead of the game. What does a couple of billion $s mean to them?

     

    Expecially since it can be written off its taxes!
    21 Apr 2014, 12:35 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (3050) | Send Message
     
    sam

     

    The buy agreement by MSFT of Nokia handset was Sept 2013
    22 Apr 2014, 08:58 AM Reply Like
  • samuel_liu
    , contributor
    Comments (2798) | Send Message
     
    NYCTxBanker:

     

    The Msft-Nok uniting operations was in 2011 or before, because of really lousy after-sales service, not only did I write (May 2011) letters to various levels of Nokia regional HQs, also one to Microsoft in Seattle.

     

    Should have mentioned I was long Msft.
    22 Apr 2014, 09:25 AM Reply Like
  • hunter012
    , contributor
    Comments (289) | Send Message
     
    Google can -still- buy Nokia.. see Microsoft didn't get any of the patents, and they didn't buy Nokia. So don't jump to wrong conclusions without knowledge. Google doesn't want hardware. Microsoft bought the hardware from Nokia
    22 Apr 2014, 11:30 AM Reply Like
  • La Rue
    , contributor
    Comments (894) | Send Message
     
    Hopefully many questions will be answered on the 29th.
    21 Apr 2014, 11:43 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10793) | Send Message
     
    Yeah. . .right.
    27 Apr 2014, 05:56 PM Reply Like
  • jens_dev
    , contributor
    Comments (13) | Send Message
     
    What about the Indian elephant in the room?
    21 Apr 2014, 12:29 PM Reply Like
  • plumskiter
    , contributor
    Comment (1) | Send Message
     
    What does this mean for Nokia shareholders?
    21 Apr 2014, 12:30 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10793) | Send Message
     
    Price will go down.
    21 Apr 2014, 02:03 PM Reply Like
  • HansKristian
    , contributor
    Comments (163) | Send Message
     
    It seems like the Chennai factory problems are solved, and that Microsoft are going to be the new owner. Otherwise that too would be in the list of Changes. Maybe the Indian authorities has come to theirr sense.
    21 Apr 2014, 01:21 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10793) | Send Message
     
    Moe: Ah you guys are suckers.
    Curly: Look, Larry Moe, Larry Moe, a SALE!
    Larry: Yeah look Moe, so it is!
    Curly: Ahh AHhh Ahhh, look the prices keep fallin' MOE! Let's go get some stuff!
    Moe: Now hold up you guys. Those sales people will eat you alive. Move over and let a pro show you how its done. First thing we're doing is waitin' for Godot!
    Curly: Larry, Moe CHEESE!
    21 Apr 2014, 02:12 PM Reply Like
  • Mike Andrewes
    , contributor
    Comments (75) | Send Message
     
    Thanks Schemp.
    21 Apr 2014, 05:05 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10793) | Send Message
     
    Operator: OK, so today we'll open questions from MegaFundBanker.

     

    MegaFundBanker: So, yes, thanks for taking my question. This one is for Rav, not Timo: So, what do you want to do with HERE and second, how do you propose to monetize it?

     

    Rav: I'm actually going to allow Timo to answer that since he has been more intimate in that area, meaning I have not a clue what HERE even is. So, with that said, here's Timo.

     

    Timo: Well, first, we want to flu[inaudible] and then take that increment of market share and ber[inaudible] into flubberlubberhubberbubber [inaudible].

     

    Operator: OK, thanks Timo, next question please.

     

    BLOOMBERG, April 30th 2014
    After announcing a new CEO and forward looking statements, and a loss in revenue, Nokia share-prices got plastered and fell from where they have been for the last eight months, at US 7.23, back to pre-Microsoft deal announcement to US 3.25"

     

    The CFO of Nokia, Timo Flubberizer could not be reached for announcement. The CEO could also not be reached for comments, as his Lumia cell phone does not work in Tahiti.

     

    DAY TOP LOSERS
    (1) Nokia down 43%.
    27 Apr 2014, 05:58 PM Reply Like
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