Nokia Shareholders Expected To Approve Microsoft Deal Later Today

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Nokia’s Extraordinary General Meeting (EGM) will be held later today at 2 p.m. at Helsinki Ice Hall in Finland. This meeting will allow Nokia shareholders to consider and vote on a proposal to confirm and approve the transactions contemplated by the Stock and Asset Purchase Agreement between Nokia and Microsoft.

As part of the deal, Nokia will sell substantially all of its Devices & Services Business, including assets and liabilities to the extent primarily related thereto, to Microsoft for an aggregate purchase price of EUR 3.79 billion in cash, subject to certain adjustments, to be paid upon the consummation of the transactions contemplated by the Purchase Agreement, which is expected to take place in the first quarter of 2014 (the transactions contemplated by the Purchase Agreement collectively the “Sale of the Devices & Services Business”).

Another important part of the Microsoft and Nokia deal is the patent agreement.

Apart from the Devices and Services division sale, Microsoft and Nokia will sign a mutual patent license agreement in which Nokia will grant Microsoft a 10-year license to certain of the Nokia’s patents upon consummation of the Sale of the Devices & Services Business, and Microsoft will grant the Company reciprocal rights to certain of Microsoft’s patents for use in Nokia’s HERE business and make a payment of EUR 1.55 billion in cash to the Nokia and, as consideration for the unilateral right to extend the term of the Patent License Agreement to perpetuity, an additional EUR 100 million payment to the Company. Additionally, Microsoft will become a strategic licensee of the HERE location platform, and will pay the Company separately for the services provided under this license. These licensing arrangements become effective upon consummation of the Sale of the Devices & Services Business.

Today’s voting at Nokia’s shareholders meeting is only for selling Devices & Services Business and it does not include for the approval of the Patent License Agreement or the HERE licensing arrangement.

What do you think will happen? I expect a smooth acquisition process for Microsoft.

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