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EU Regulators Approve Microsoft Deal for Nokia
EU Regulators Approve Microsoft Deal for Nokia

By Seth Fitzgerald
December 5, 2013 2:02PM

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According to the European Commission, there are only "moderate" overlaps between Microsoft and Nokia, and while that is true as a whole, Microsoft's smartphone sector is already dominated by Nokia. As there are more than enough phone manufacturers, particularly Samsung and Apple, the regulators did not picture Microsoft becoming too strong.
 


Regulators within the European Union have given the green light to Microsoft's $7.4 billion buyout of Nokia. This move had been expected since the European Commission generally does not oppose moves such as this one, but now that regulators have officially accepted the acquisition, Microsoft can move forward with the massive deal.

Prior to today's approval, regulators in the United States had signed off on the buyout alongside Nokia's shareholders. Microsoft has been eying Nokia's hardware business for more than a year, especially as Nokia's line of Lumia smartphones make up the majority of Windows Phone devices.

A Significant Deal

It's not often that a company pays $7.4 billion in an acquisition, however Microsoft and Nokia are by no means small companies. This move is somewhat defensive for Microsoft mainly because Nokia's control over the Windows Phone market was making it harder for Microsoft to do much with the platform. Now that the companies can work together, Windows Phone may be able to compete against Android and iOS.

The EU's antitrust authority, the European Commission, gave its final approval after deciding that the deal would not hurt competition. As Nokia and Microsoft are already so close, the deal will only make things official.

According to the commission, there are only "moderate" overlaps between Microsoft and Nokia and while that is true as a whole, Microsoft's smartphone sector is already dominated by Nokia. As there are more than enough phone manufacturers, particularly Samsung and Apple, the regulators did not picture Microsoft becoming too strong in any of its markets as a result of the deal.

Even with multiple competitors, the deal is still one of the largest in the technology industry. At most, companies pay around $1 billion during an acquisition, making the $7.4 billion price tag impressive, which is the same reason Nokia's shareholders saw little downside to the acquisition.

Greater Connection

The buyout will result in Microsoft and Nokia working nearly as closely as possible, however there may end up being an even greater connection between the two companies. Nokia's former CEO Stephen Elop is still in the running for the position of Microsoft's CEO now that Steve Ballmer, its current chief executive, is leaving.

Nokia will likely play a major role in Microsoft's coming products, which would make Elop even more useful as CEO since he has significant experience working with people at Nokia. As of right now, Microsoft has reportedly been able to get its candidate list down to just four people, of which Elop is one.
 

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