Nokia shareholders are today expected to deliberate on the sale of Nokia’s mobile business to Microsoft. The deal is expected to be approved by a majority of the shareholders which will see the mobile giant cut its losses. The deal between Nokia and Microsoft was approved in September and Microsoft will be acquiring Nokia’s device and services business as well as licence Nokia’s patents for 5.44 billion euros. The mobile company was affected by a late start in the smartphone race.
Adoption of Windows Phone software for Nokia smartphones also brought former CEO Stephen Elop under heavy criticism. Elop chose Windows Phone over Nokia’s own mobile system Symbian and the more popular Android. Despite the strong criticism of Elop’s move, Nokia was in dire financial straits by the time he took over in 2010.
Nokia’s deal with Microsoft will see the mobile company cut its losses while improving its cash flow to around 8 billion euros in Q1 2014 from an initial 2 billion in Q3 2013. Telecom equipment unit Nokia Services and Networks (NSN) will now contribute over 90% sales to the remainder of the company. Nokia shares closed at 6.00 euros on Monday with the deal signalling better times for the company.
A section of the shareholders do not approve the sale of Nokia’s mobile business due to the company’s significance in the Finnish economy. Today’s meeting will therefore see these shareholders vent their dissatisfaction. The company propelled Finland’s success into a high-tech powerhouse, with Nokia being worth 4% of the national GDP.
Source: Reuters
