Merger and acquisition deals are notoriously glacial in their progression, but after being proposed seven months ago, the acquisition of Nokia Corp.’s handset operations by Microsoft Corp cleared a major hurdle on April 7 and is one step closer to completion.
The Chinese Ministry of Commerce has given the deal the go-ahead following Microsoft’s agreement to comply with a list of licensing conditions. Many of those conditions relate to patent protection for Android phone manufacturers. As the home of many Android manufactures, China has a vested interest in the legal and copyright dispute-free production of Android devices.
That agreement will last for up to eight years, and relates to up to 200 types of patent families that Microsoft will gain access to with the deal. Google has previously pushed China to ensure the deal would not push licensing agreement costs higher, but Nokia argues that its copyright practices have never been predatory. It used the announcement as an opportunity to drive that point home.
"No authority has challenged Nokia's compliance with its ... undertakings related to standard-essential patents or requested that Nokia make changes to its licensing programme or royalty terms," Nokia said in a statement on Tuesday.
In offloading its handset manufacturing operations to Microsoft, Nokia will be able to focus on its networking and OEM subsections. In the process, Microsoft hopes to bolster its struggling smartphone presence against giants like Apple and Google.
In an interview in the November 2013 edition of InsideCounsel, Microsoft General Counsel Brad Smith said that the Microsoft-Nokia deal, “gives us the chance to add a business that is complementary to our own … transitioning us from a pure software company to a devices and services company.”
While Nokia has been faced tax disputes relating to its operations in India, all other regulatory issues have been cleared at this point and the deal is expected to move forward. The original deal was proposed in September 2013, for roughly $7 billion.
For more on licensing deals check out these stories: