Nokia Gains China Clearance for Microsoft Deal

NEW YORK (The Deal) -- Finland's Nokia  (NOK) said Tuesday it had obtained Chinese regulatory clearance for its handset and patents sale to Microsoft (MSFT), setting the companies on track to close the 5.44 billion ($7.5 billion) deal later this month.

Nokia on March 24 pushed back the expected completion date of the September deal to April from the first quarter, noting that the companies still needed approval in unspecified Asian markets. The transaction already had clearance in jurisdictions including the U.S. and European Union.

"We believe that China approval was proving to be the major delaying factor for the deal and hence that the announcement today puts the deal back on track to close during April 2014 as we continue to see no anti-competitive reasons to block the deal," Credit Suisse Group analysts noted. "While the company has not provided details around which other regions still need to approve the deal we believe this could be Taiwan and/or Korea."

Nokia said that in the regulatory process to date, no officials had requested it make changes to its patent licensing program or royalty terms. Nokia shares were up 0.115, or 2.2%, at 5.435 by early afternoon in Helsinki. Its shares have risen about 80% since the September Microsoft deal, which Credit Suisse analysts said will make the Finnish company "cash-rich and IP-driven."

Nokia has said it will return "excess capital" to shareholders after completing a review of its three remaining businesses.

Microsoft, for its part, wants to use the handset purchase to become a late protagonist in the smartphone revolution.

Former Nokia CEO Steven Elop is transferring to Microsoft as part of the deal. Nokia chairman Risto Siilasmaa on Sept. 3 became Elop's interim replacement.

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