Microsoft to get $51 million if Nokia shareholders reject deal

microsoft1NEW YORK: Finnish firm Nokia, which is selling its devices and services business to Microsoft, will pay the software giant 37.9 million euros (about $51.2 million) if the handset maker’s shareholders oppose the deal.

In addition, Nokia will pay Microsoft another 75.8 million euros if its shareholders reject the transaction and the company sells at least 20 per cent of the devices and services (D&S) business to another buyer within a year of terminating the deal, according to a regulatory filing.

On September 3, Microsoft said it will acquire Nokia’s handset business for 5.44 billion euros in an effort to strengthen its position in the smartphone market. Nokia’s extraordinary general meeting for consideration of the sale is scheduled for November 19.

In a filing to the US Securities and Exchange Commission (SEC), Nokia said: “If the sale of the D&S business is not confirmed and approved by our shareholders…we will not sell the D&S business to Microsoft International at this time and we will continue to conduct our business in the ordinary course and evaluate all available go-forward strategic alternatives.

“In addition, both Nokia and Microsoft International will have the right to terminate the purchase agreement and we would be obligated to pay Microsoft International or its designee a damages fee equal to 37,900,000 euro.”

The Finnish firm said if it gets a competing offer and concludes a transaction within a year of terminating the purchase agreement, it will have to pay Microsoft an additional fee equal to 113,700,000 euros, less the 37,900,000 euro damages fee, if previously paid to the software company.

This additional fee would be applicable if the transaction relates to a competing proposal to acquire control of at least 20 per cent of its voting securities or all or a material portion of the D&S business, according to the filing.

If shareholders reject Microsoft’s offer, the patent license agreement between Nokia and Microsoft will not become effective and the Finnish firm will not receive the 1.65 billion euros payable under the agreement.

“In addition, Microsoft will not become a licensee of Nokia’s HERE location platform,” the filing said.

source : Times of India