rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Microsoft-Nokia deal receives CCI's green signal

Microsoft-Nokia deal receives CCI's green signal

October 29, 2013 20:49 IST

Fair trade watchdog CCI has approved Microsoft's proposed $7.2 billion acquisition of Nokia's mobile devices business, citing that the deal would not have adverse impact on competition in the Indian market.

Seen as one of the significant global M&A deals, software giant Microsoft would acquire Finnish major Nokia's devices and services business.

The regulator has given the approval in less than two months from the day the transaction was announced. Approving the transaction, Competition Commission of India (CCI) said the combination "is not likely to have appreciable adverse effect on competition in India."

"As regards the proposed combination, it is noticed that in India, while Nokia is active in the D&S (Devices & Services) business of mobile handsets, Microsoft is not active in that business," CCI said in its order dated October 24 but made public today.

A notice seeking approval was submitted to the CCI on October 3 while the deal was finalised on September 2. As per the deal, Microsoft Corp and its wholly-owned subsidiary Microsoft International would acquire Nokia Corp's Devices and Services (D&S) business and related arrangements.

Microsoft would acquire substantially Nokia's entire D&S business, including mobile phones and smart devices business units. According to CCI, it is generally observed that D&S business of mobile/smartphones and tablets, along with the business of operating system and other applications that are used in the devices, is extremely dynamic. This, in turn, makes the product life cycles of such devices very short, it added.

Further, the regulator said that it is the ecosystem in this business which drives the demand between the users, application developers, and designers/manufacturers. CCI noted that the vertical relationship between Microsoft and Nokia is "relatively insignificant" after taking into consideration the minimal share of Microsoft as well as the presence of major players like Google and Apple in the business of the operating software used in the smartphones and tablets in India.

Besides, the regulator said Nokia has minimal share in the business of mobile/smartphones and there is presence of numerous other players like Samsung, Apple, Blackberry, Sony, HTC, LG, Lenovo, Micromax, Lava, Spice, Karbonn etc in this business in India. 

Windows Phone OS is used in Nokia Lumia range of smartphones.

Image: Microsoft CEO Steve Ballmer (L) and Nokia CEO Stephen Elop (R) introduce new Nokia phones with Microsoft's Windows 8 operating system at an event in New York.
Photographs: Brendan McDermid/Reuters

© Copyright 2013 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.