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Nokia Corporation Message Board

  • vw500kmiles vw500kmiles Sep 3, 2013 9:12 PM Flag

    The whole story please

    Too much repeated news, I could not figure what is the deal?

    $7.18B offer for half of NOK means $14B valuation or something more?

    The half MSFT interested in are not making money, the equipment part is making money (I assume, true?)

    Then it should be $14B evaluation, say $20B, then the total evaluation is X2.3 of current price. Then what we are to value at $12-ish?

    Anyone knows the whole story? Please work it out for us. Thanks!

    Sentiment: Hold

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    • corneliusflake Sep 3, 2013 10:22 PM Flag

      here is the deal -- (part 1)


      Under the terms of the agreement, Microsoft will acquire substantially all of Nokia’s Devices and Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services-related production facilities, Devices & Services-related sales and marketing activities, and related support functions. At closing, approximately 32,000 people are expected to transfer to Microsoft, including 4,700 people in Finland and 18,300 employees directly involved in manufacturing, assembly and packaging of products worldwide. The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50 percent of Nokia’s net sales for the full year 2012.

      Microsoft is acquiring Nokia’s Smart Devices business unit, including the Lumia brand and products. Lumia handsets have won numerous awards and have grown in sales in each of the last three quarters, with sales reaching 7.4 million units in the second quarter of 2013.

      As part of the transaction, Nokia is assigning to Microsoft its long-term patent licensing agreement with Qualcomm, as well as other licensing agreements.

      Microsoft is also acquiring Nokia’s Mobile Phones business unit, which serves hundreds of millions of customers worldwide, and had sales of 53.7 million units in the second quarter of 2013. Microsoft will acquire the Asha brand and will license the Nokia brand for use with current Nokia mobile phone products. Nokia will continue to own and manage the Nokia brand. This element provides Microsoft with the opportunity to extend its service offerings to a far wider group around the world while allowing Nokia’s mobile phones to serve as an on-ramp to Windows Phone.

      • 1 Reply to corneliusflake
      • corneliusflake Sep 3, 2013 10:23 PM Flag

        (part 2) --

        Nokia will retain its patent portfolio and will grant Microsoft a 10-year license to its patents at the time of the closing. Microsoft will grant Nokia reciprocal rights to use Microsoft patents in its HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement in perpetuity.

        In addition, Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four-year license.

        Microsoft will also immediately make available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible notes that Microsoft would fund from overseas resources. If Nokia decides to draw down on this financing option, Nokia would pay back these notes to Microsoft from the proceeds of the deal upon closing. The financing is not conditional on the transaction closing.

        Microsoft also announced that it has selected Finland as the home for a new data center that will serve Microsoft consumers in Europe. The company said it would invest more than a quarter-billion dollars in capital and operation of the new data center over the next few years, with the potential for further expansion over time.

    • Value it at the present value of future cash flows, I don't know what those will be but considering NSN is already profitable chances are those present values will be positive.

      Nokia will probably get the 7.2 billion which will wipe out all of its debt and give it a clean slate. Those NSN profits will then shine and add value to PPS.

      Estimates and fundamental analysis is too much work, requires alot of guessing, and are usually wrong. I tend to go with my gut and it says 8 in 12 months or less. From there who knows.

      Sentiment: Strong Buy

5.36+0.14(+2.68%)May 24 4:02 PMEDT