Absorption and asset sale of Nokia

• Main article: Nokia Corporation
• Chronicle of events: History of Nokia

2020: Purchase of the company for it is strengthened positions in the market of optical networks Elenion Technologies

On February 19, 2020 Nokia announced Elenion Technologies purchase. Financial and other terms of agreement of the company did not begin to open. It is known only that the transaction is going to be closed in the first quarter 2020. Read more here.

2018

Sale of medical business to the co-founder of Withings

At the beginning of May, 2018 Nokia announced sale of medical business to Eric Carreel, cofounder and former chairman of the board of directors of Withings company which the Finnish producer of telecommunication equipment purchased in 2016 for 170 million euros. Afterwards Withings formed the basis of division of Digital Health Nokia. Read more here.

SpaceTime Insight purchase

On May 7, 2018 Nokia announced purchase of software developer for industrial Internet of Things of SpaceTime Insight. The cost of the transaction of the company was decided not to be disclosed. Read more here.

2017: Nokia buys Comptel for 347 million euros

On February 9, 2017 the Finnish producer of telecommunication equipment Nokia announced acquisition of Comptel for 347 million euros for the purpose of strengthening of software business. Read more here.

2016: Purchase of Withings for 170 million euros

On April 26, 2016 Nokia announced acquisition of Withings for 170 million euros. Due to this purchase which will be paid with cash the Finnish company expects to strengthen positions in the market of Internet of Things (Internet of Things, IoT). Read more here.

2015

Audis, BMW and Daimler redeemed the Here Nokia cards

On August 3, 2015 the company Nokia announced sale of cartographic business of Here Nokia to the German auto giants BMW, Daimler and Audi (enters into concern Volkswagen). The cost of purchase is estimated at 2.8 billion euros. In more detail here.

Purchase of Alcatel-Lucent for 15.6 billion euros

On April 15, 2015 Nokia Corporation announced purchase of Alcatel-Lucent company. According to the results of this transaction which became the largest for the Finnish vendor the largest producer of telecommunication equipment will appear.^[1]

The Nokia company will pay 15.6 billion euros, or 4.12 euros for an action for acquisition of Alcatel-Lucent that is 8% less than its market value as of April 14, 2015. The announced transaction provided to securities of Nokia growth by 2.8% whereas the quotations of Alcatel-Lucent decreased by 9% though on the eve of the announcement of the agreement they jumped by 16%.

As a result of consolidation of Nokia and Alcatel-Lucent the Nokia Corporation company with the state exceeding 110 thousand people will be created. Nokia promises not to reduce jobs in addition to those that planned Alcatel-Lucent.

Nokia Rajeev Suri, and the chairman of the board of directors — Risto Siilasmaa, the positions taking the same in Nokia will become the head of Nokia Corporation. Securities of the united company will be divided between shareholders of Nokia and Alcatel-Lucent in the ratio of 66.5% to 33.5%. It is expected that the synergy effect of a company merger will be 900 million euros by 2019.

Purchase of Alcatel-Lucent by Nokia company is going to be issued officially in the first half of 2016. At the time of the announcement of the transaction it was approved by Board of Directors of both producers. Later the solutions on the matter shareholders will also state Nokia and regulating authorities.

By April 15, 2015 market capitalization of Alcatel-Lucent is estimated at $11.6 billion against  $29.5 billion at Nokia. Total revenue of the companies in 2014 exceeded $27 billion, and it means that the joint Nokia Corporation can become the first in revenue equipment supplier for mobile networks, having outstripped Ericsson and Huawei, Bloomberg notes.^[2]

Purchase of Alcatel-Lucent will become for Nokia of the largest in its history (acquisition of Navteq for $8 billion in 2008 was the former record transaction) and the biggest in telecom industry since 1999.

Negotiations on merger of Alcatel-Lucent for 12.7 billion euros

On April 14, 2015 Nokia Corporation announced the intention to purchase the competitor of Alcatel-Lucent. However the probability of the conclusion of such transaction is not 100%.

According to Bloomberg, referring to the statement of Nokia, negotiations between the Finnish company and Alcatel-Lucent "concerning complete merge are at an advanced stage", but there is no confidence that they will come to the end with signing of the contract.^[3]

According to news agency, Nokia is going to get support of the French authorities. The last already began to work with consultants over that  later transactions to save the jobs connected with research activity in Alcatel-Lucent. It should be noted that the president of France Francois Hollande tried to block several corporate merges earlier.

Nokia can purchase Alcatel-Lucent for 12.7 billion euros

By estimates of the analyst Alexander Peterc, the Nokia company can pay 12.7 billion euros for Alcatel-Lucent. As of April 14, 2015 market capitalization of Alcatel-Lucent makes $12.5 billion against $30.6 billion at Nokia.

How Nokia officially announced a possibility of accession of Alcatel-Lucent, the French edition Les Echos wrote that heads of the companies conduct negotiations since January, 2015.

According to sources of Bloomberg, Nokia can purchase not all Alcatel-Lucent, and only key division of the company which is engaged in development and sale of telecommunication solutions for wireless infrastructure. The volume of this business in 2014 was 4.7 billion euros that corresponds to 36% in total revenue of Alcatel-Lucent.

Merge of Alcatel-Lucent and Nokia will lead to creation of the large producer of the telecommunication equipment capable to compete adequately with such large players of the market as Huawei and Ericsson.

After emergence of information on negotiations of Alcatel-Lucent and Nokia of an action of the last fell in price for 6.32% while the quotations of the Franco-American company jumped by 12.14%.

2013

Sale of mobile business of Microsoft for $7.2 billion

Microsoft confirmed on September 2, 2013 intention to purchase the division of Nokia corporation which is engaged in production of mobile devices. Microsoft and Nokia Corporation companies announced the conclusion of the transaction as a result of which Microsoft will purchase businesses of Nokia on production of devices and services, licenses for the patents belonging to Nokia and also the license for the cartographic services belonging to Nokia.

Under the terms of the agreement, Microsoft will pay 3.79 billion euros for divisions on production of gadgets and services and also 1.65 billion euros for licensing of different patents of Nokia. As a result the total amount of the transaction will be 5.44 billion euros. According to media, the deal will be closed in the I quarter 2014 when it is approved by shareholders of Nokia, regulating authorities and other necessary conditions of its closing will be satisfied. Extraordinary general shareholder meeting Nokia where the agreement with Microsoft will be considered, will pass on November 19, 2013.

Representatives of the company report that 4700 employees of Nokia in Finland and 18300 workers who are directly participating in production of Nokia in other countries of the world will be taken by Microsoft. Let's note that revenue of divisions which Nokia will transfer in Microsoft made about 14.9 billion euros in 2012 and created 50% of sales to the company.

Microsoft will receive the division of Nokia making smartphones including the smartphones under the Lumia brand working running the Windows platform of Phone. Microsoft will also purchase the Asha brand under which the inexpensive Nokia phones are issued, and will license a brand of Nokia.

Except smartphone division of Microsoft will purchase business on production of the Nokia mobile phones which sales volume in the II quarter 2013 was 53.7 million pieces. Microsoft will also purchase the Asha brand under which the inexpensive Nokia phones are issued and will license a brand of Nokia. At the same time Nokia will continue to own and manage the brand. In addition Nokia will transfer to Microsoft the long-term license agreement with producer of processors Qualcomm and other license agreements. Nokia will save own portfolio of patents and will provide Microsoft of the license for the patents for 10 years from the moment of closing of the transaction.

The portfolio of Nokia includes 38500 patents for developments and design solutions. Microsoft will grant to Nokia the right to use patents of Microsoft in cartographic service Here Nokia. Microsoft will become the strategic licensee of Here service and will separately pay Nokia for the four-year license. Nokia will give to Microsoft the chance to prolong the patent agreement between the companies for unlimited term. Microsoft will immediately provide to Nokia financing of 1.5 billion euros in the form of three tranches for 500 million euros in convertible bonds. This arrangement as emphasize the companies in the message, does not depend on closing of the transaction. Microsoft also announced that the new data processing center which will service the European users of Microsoft will be located in Finland. The company expressed the intention to invest in its creation and operation more than 250 million dollars within the next several years.

Price of papers of Nokia Corp. jumped by 47%, record in the history of the company, the first minutes of biddings on the stock exchange in Helsinki on Tuesday, September 3, on messages about Microsoft Corp sale. business on production of mobile phones.

The redemption of a share of Siemens in Nokia Siemens Networks for 1.7 billion euros

In June, 2013 Nokia and Siemens announced signing of the binding agreement within which Nokia will purchase a 50 percent share of Siemens in Nokia Siemens Networks joint venture.

Transaction amount is 1.7 billion euros. From them 1.2 billion euros will be paid by money, before completion of the transaction.

The transaction was approved by the management of both parties and is subject to end after accomplishment of standard procedures in the III quarter 2013. After end the enterprise will become 100 percent subsidiary company Nokia.

According to the official statement, the current management of Nokia Siemens Networks will remain, including Rajeev Suri, the CEO of joint venture. The headquarters will remain in Espoo, Finland.

Commenting on the transaction, the president and the chief executive officer of Nokia Stephen Elop said that this transaction interests Nokia first of all, because of the equipment LTE which makes joint venture and that acquisition of a missing share in Nokia Siemens Networks will do good to shareholders of the Nokia group.

In turn, Joe Kaeser, the chief financial executive of Siemens, told that Siemens sells the share because the companies are more interesting other directions: the power, utilities and health care^[4].

From the moment of the basis the enterprise became one of the largest equipment manufacturers of communication who is used by operators in more than 150 states worldwide.

Credit of Microsoft of 2 billion euros for purchase of a share in Nokia Siemens Networks

Risto Siilasmaa (at the left) and Steve Ballmer on press conferences, September, 2013.

After the transaction in November, 2015 it became known that Nokia obtained from Microsoft the credit in the amount of 2 billion euros for the redemption of Nokia Siemens Networks (NSN) company on the basis of which core business of the Finnish producer – telecommunication was constructed afterwards.

During Nexterday North presentation at the conference in Helsinki in November, 2015 the chairman of the board of directors of Nokia Risto Siilasmaa told about that, in 2013 he asked the CEO of that time of Microsoft Steve Ballmer to grant to the company the loan in 2 billion euros for acquisition at Siemens of joint venture for release of the equipment for telecom operators. This business of the company was estimated at 3.4 billion euros, profitable to Nokia, whereas analysts called more appreciation – from 6 to 10 billion euros, Siilasmaa noted.

According to him, the company could not miss an opportunity to purchase NSN on so to "the good price" especially as after sale of telephone business of Microsoft (this transaction was announced in September, 2013 – in few months after the announcement of purchase of a 50 percent share of NSN) "Nokia could remain idle". However the European vendor had neither means for acquisition of NSN, nor a contact to investors.

Then Risto Siilasmaa called Steve Ballmer and asked him that Microsoft borrowed Nokia of 2 billion euros — then it became one of sales terms of mobile division of the Finnish company American.

"However, it would give us this money irrespective of, we concluded the bargain on phones or not. We received necessary financing for purchase of NSN therefore Nokia found a basis to remain one of the most known Finnish companies" — the chairman of the board of Nokia said.

By November, 2015 the market value of Nokia by 15 times exceeds that that was at the company for 3.5 years before, Risto Siilasmaa noted.

"It is quite seldom possible to see so deep conversions for such short period" — he added.^[5]

2012: Sale of 90% in mobile phone manufacturer from Vertu precious metals

In December, 2011 it became known that Nokia looks for the buyer of the subsidiary company releasing the elite Vertu phones. The most probable candidates are other producers of devices of this category. Together with Vertu the market is divided by Mobiado, Gresso (the Russian company) and some other brands^[6].

On April 30, 2012 there were messages that Nokia is close to sale of Vertu of the British investment company Permira.

In June, 2012 it became known that Nokia will leave a controlling stake of the Vertu Corporation company belonging to it. The EQT VI investment group will become the new owner of 90% of stocks of the largest mobile phone manufacturer from precious metals. Nokia will reserve a minority stake in 10% of stocks. The transaction price, as well as its other conditions, does not reveal, however it is known that it should come to the end in the second half of 2012 in case of obtaining all necessary permissions from regulating authorities.

New owners of Vertu are sure of advantage of purchase.

'Vertu, with its famous brand, reputation of the indisputable leader of the industry and attractive indicators of growth, perfectly keeps within an investment strategy of EQT VI. We are glad to an opportunity to develop Vertu as the autonomous company and to stimulate the further growth of a segment of luxury mobile phones due to considerable investments into development of network of sales, marketing and new product development", - the representative of EQT Partners Jan Stalberg^[7] reported^[7].

2008: Merger of Navteq for $8 billion

Acquisition of Navteq company by Nokia corporation for $8 billion took place in 2008.

Notes