Microsoft and Nokia announced this morning that the Chinese Ministry of Commerce has approved Microsoft's acquisition of Nokia's devices and services businesses, subject to certain conditions to which Microsoft has agreed. The approval clears the way for the delayed $7.4 billion acquisition, which is now expected to close within days.
"The planned transaction whereby Nokia plans to sell substantially all of its devices and services businesses to Microsoft has today received regulatory approval from the Ministry of Commerce of the People's Republic of China," a Nokia statement notes. "Nokia and Microsoft have now received regulatory approvals from the People's Republic of China, the European Commission, the U.S. Department of Justice and numerous other jurisdictions."
Microsoft announced its intention to purchase most of Nokia's devices and services businesses—including all of its mobile and smart phone handsets—and to license other Nokia properties such as the Nokia brand and HERE location services—in September 2013. At the time, the firms said they expected the deal to close by the end of the first quarter of 2014. But regulatory slowdowns in China related to complaints from Samsung and China-based Android phone makers delayed the completion of the transaction.
In its agreement with the Chinese Ministry of Commerce (MOFCOM), Microsoft promises to license standard-essential patents to Android phone makers for "fair, reasonable and non-discriminatory terms," an industry standard known as FRAND, at price levels commensurate with its licensing practices elsewhere. And it will not seek court orders to prevent the sale of smartphones within China by companies that are licensing those patents.
These terms are no different than what Microsoft offers to licensees outside of China.
"MOFCOM's decision effectively adopts Microsoft's current patent licensing practices," Microsoft corporate vice president and deputy general counsel David Howard wrote in a post to The Official Microsoft Blog. "In reaching its decision, MOFCOM concluded after its investigation that Microsoft holds approximately 200 patent families that are necessary to build an Android smartphone."