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Nokia acquisition delayed, global regulatory challenges cited

Behind most every acquisition is the principle that two companies with separate ownership unite and operate under the same leadership to obtain some strategic or financial goal. And that is often where the similarities end. Every acquisition is different; each with its own challenges, drawbacks and major advantages. While Microsoft’s latest business acquisition has already received most of the required regulatory approvals, the nature of the acquisition brings with it some issues.

The approximately $7.5 billion sale of Nokia's phone business to Microsoft is now delayed until April. Though the deal has already received antitrust approval from United States and European regulators, talks with Asian regulators continue. Additionally, Nokia has been caught in an ongoing tax battle with the Indian government that is halting the transfer of assets in the country to Microsoft.

The delay has fueled speculation that Nokia may have to make bigger technology patent concessions in order for the acquisition to go through. After this sale, more than 90 percent of Nokia’s sales will come from its telecom network unit. Industry eyes remain on its patent portfolio as a promising source of future growth.

Nonetheless, despite the delay in this complex business transaction the two companies have expressed their ongoing commitment to the deal.

Having a knowledgeable team is essential in any business acquisition, especially when acquiring under less than ideal circumstances. This case illustrates a deal between two large corporations, but even in small business mergers, conducting your due diligence is essential. Consulting a New Jersey law firm to assist in understanding business compliance with the various state and federal laws is a solid first step in a successful acquisition execution strategy.

Source: Reuters, "UPDATE 3-Microsoft deal delay may mean more Nokia patent concessions," Jussi Rosendahl, March 24, 2014

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