Nokia completes Microsoft deal without Chennai plant
The Finnish handset maker expects the value of the transaction, which was completed after a month's delay, to be slightly higher than the earlier announced 5.44 billion euros (about USD 7.2 billion) after final adjustments based on the verified closing balance sheet, Nokia said in a statement.
The firm had agreed to sell almost all of its Devices and Services (D&S) business to Microsoft in September. Welcoming the completion of the deal, Microsoft Chief Executive Officer Satya Nadella reiterated the focus of the Redmond-headquartered firm on a "mobile-first, cloud-first world," according to a statement from the US company.
"With the Nokia mobile phone business, Microsoft will target the affordable mobile devices market, a USD 50 billion annual opportunity," it said. Nokia said the Chennai manufacturing plant will manufacture devices for Microsoft under a service agreement.
"In India, our manufacturing facility is subject to an asset freeze by the Indian tax authorities as a result of ongoing tax proceedings. Consequently, the facility remains part of Nokia following the closing of the transaction. Nokia and Microsoft have entered into a service agreement whereby Nokia would produce mobile devices for Microsoft," it said.
The deal also excludes Nokia's plant in Masan, South Korea, which has about 200 employees and will be closed. "Amid the uncertainty for our employees in Chennai and because of the planned closure of our facility in Masan, Nokia plans to offer a programme of support, including financial assistance, which would give our employees the chance to explore opportunities outside Nokia starting from a sound financial base.
"The company plans to bring to Chennai and Masan elements of its Bridge program, which we have made available for employees affected by company changes in other sites," the firm added.