The infamous Microsoft-Nokia deal is on the rocks, is it time to panic?
Nokia and Microsoft shared the news about the acquisition on Sept. 3 last year, and predicted that the deal would close somewhere in the first quarter of 2014. At the time, the prediction was quite accurate, considering the magnitude of the deal.
One of the obvious factors that the deal had to wait for was brought about by Nokia’s global reach. This means that they needed to get the OK from multiple regional regulatory institutions.
Still on the same, Nokia state that the deal for its devices, services and patent licensing agreements has already gotten the green light in the key areas of U.S and Europe. This leaves out the tricky Asian region, which proved a harder nut to crack with a number of antitrust authorities fine combing the deal.
This brings us to the messy issue that Nokia has with India tax authorities, because of Chennai factory operations. They are required to put up about $570 million in escrow to ensure future tax payment. A figure that Nokia refused to pay, asking for something way lower.
The obvious course of action for Nokia was to try and beat the charges in court. Well, this isn’t exactly going well for them with the last of the appeals having been denied. They are actually running out of options, and it’s my strong belief that they should just cut their losses and meet India’s escrow account requirements, I mean it could end up being the path of least resistance.