Nokia Interim CEO: We Have Three Strong Businesses Remaining
The Nokia that remains after it sells its phone business to Microsoft will be a considerably smaller and lower-profile company.
It will hopefully be a more financially sound entity, as well, Nokia interim CEO Risto Siilasmaa told AllThingsD on Monday night in a telephone interview shortly after the deal was announced.
“We will continue to have three strong businesses,” Siilasmaa said.
Nokia, which began by producing paper and rubber in the 1800s, is essentially exiting the mobile phone business that made it world-famous, selling both its Lumia smartphone business and its low-end mobile phone unit to Microsoft.
Remaining are its network-equipment business, its patent portfolio and its Here location-based services arm.
“Overall, we are very happy with the fact we will be able to support those businesses with a much stronger balance sheet,” Siilasmaa said.
Nokia has been hit with continual bond-ratings downgrades and concerns about its long-term viability once the checks from Microsoft stopped coming. Under its previous deal with Microsoft, Redmond had been paying Nokia hundreds of millions of dollars in quarterly “platform support payments.” However, the balance of payments was due to shift, with Nokia now owing more in minimum guaranteed royalties than it had coming in future payments from Microsoft.
Siilasmaa insisted that selling its namesake phone business to Microsoft was best for all of the company’s stakeholders, including its 88,000 employees, 32,000 of whom are due to become Microsoft employees after the deal closes.
It will also immediately be a benefit for owners of Nokia stock, he said.
“The deal is immediately accretive to earnings,” he said. “We believe we are making a very good choice for Nokia shareholders.”
The deal, which requires regulatory approval and a nod from Nokia’s shareholders, is expected to close in the first quarter of 2014.
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