Microsoft’s $7.2BN Deal To Buy Nokia’s Devices Business Gets The Nod In China

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Chinese regulators have approved Nokia’s planned sale of its devices business to Microsoft, taking the $7.2 billion deal one step closer to closing.

Nokia said today it has received regulatory approval from the Ministry of Commerce of the People’s Republic of China.

Nokia and Microsoft have now received regulatory approvals from the People’s Republic of China, the European Commission, the U.S. Department of Justice and numerous other jurisdictions. Nokia and Microsoft continue to expect the transaction to close during April 2014, as communicated in our press release from March 24, 2014,” it said in a statement.

Last month the two companies said they expected the deal to close in April, a little later than the originally slated Q1 timeframe — saying the delay was down to pending approvals from antitrust regulators in Asia. With China now giving the green light, that’s one more regulatory authority checked off the list.

Nokia has been involved in a tax bill dispute in India, so it’s possible that situation is holding up regulatory approval there. Regardless, Nokia and Microsoft are still saying they expect the deal to close this month, within “weeks”. A Microsoft spokesman declined to confirm which markets are still pending regulatory approval.

Nokia also makes a point of emphasizing that its FRAND patent licensing practices have not been challenged during the regulatory review process.

“The regulatory approval process has involved a thorough review of Nokia’s patent licensing practices by several competition authorities around the world. During that process, no authority has challenged Nokia’s compliance with its FRAND undertakings related to standard-essential patents (licensing on fair, reasonable and non-discriminatory terms) or requested that Nokia make changes to its licensing program or royalty terms,” it added.

Update: Microsoft has also released a statement which touches on the patent licensing issue, and reveals that the Chinese Ministry of Commerce did have some concerns about how its patent licensing practices might change post-acquisition.

“We look forward to working through the final details to complete our acquisition of Nokia’s Devices and Services business,” Microsoft noted in a statement. “It has never been Microsoft’s intention to change its existing patent licensing policies as a result of this transaction, so while we disagree with the concerns expressed by MOFCOM [the Chinese Ministry of Commerce], the conditions imposed will not impact our future licensing practices. In reaching its decision, MOFCOM concluded after its investigation that Microsoft holds approximately 200 patent families that are necessary to build an Android smartphone.”

Microsoft said the Chinese regulatory approval of the Nokia devices deal is subject to a set of conditions which relate to standard-essential patents and FRAND patent licensing terms. A full list of the commitments Microsoft has agreed to to satisfy the Chinese regulator can be found here.

Commenting on the Microsoft blog, David Howard, Corporate Vice President & Deputy General Counsel, Litigation & Antitrust, said Redmond has been discussing the commitments with MOFCOM for the past “few months”. The regulator’s concerns had focused on ensuring Microsoft’s patent-related licensing conduct did not change after the close of the acquisition.

“There was an important principle with which MOFCOM approached these discussions from the beginning: any commitments should be focused on how our future conduct might change after we own the Nokia Devices and Services business, and should not impact our licenses signed in the past or historical practices. It has never been our intent to change our practices after we acquire the Nokia business, so while we disagreed with the premise that our incentives might change in the future, we were happy to discuss commitments on this basis,” noted Howard.