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June 20, 2013

Potential Microsoft-Nokia Deal Falls Through

Sources Tell WSJ Price and Declining Market Position Were Main Stumbling Blocks

Windows Phone Nokia Lumia 620

Microsoft and handset maker Nokia were in advanced acquisition discussions as recently as this month, but price and Nokia’s declining market position have stalled the talks, sources told The Wall Street Journal.

A source who is “familiar with the matter” told The Wall Street Journal talks are unlikely to resume.

While it is not known how much Nokia was asking for its handset division, according to the WSJ, the firm’s U.S. stock-market value is more than $14 billion and the company brought in $40.15 billion, in revenue last year from its mobile-phone division.

Nokia may still have another buyer, however.

Chinese telecom giant Huawei has expressed interest in the Finish firm.

Richard Yu, chairman of Huawei’s consumer business group, told reporters this week his company would consider buying Nokia to help propel Huawei ahead of its competition in the ultra-competitive Smartphone market.

Huawei is currently in the No. 3 slot behind top dog Samsung and runner-up Apple. Despite being third, Huawei has a lot of ground to cover to catch either of its chief rivals.

“We are considering these sorts of acquisitions; maybe the combination has some synergies but depends on the willingness of Nokia. We are open-minded,” Yu was quoted by The Finanical Times.

Although sources have said Huawei has yet to even begin talks with Nokia, Yu has made his ambitions for the company clear and it is likely the two firms will discuss an acquisition in the future.