Nokia Corporation (ADR) (NYSE:NOK) management on Tuesday will put its €5.4 billion mobile phones business deal with Microsoft for investors to discuss it in Helsinki general meeting, as well as €19 million pay-off to ex-CEO Stephen Elop.
Though the part of its business that was selling by Finish Company generates half of its revenue, however following the announcement of deal in September the shares price of the company has doubled. This indicates that investor my favor the deal but they will still concern over the potential future business of the Finish Company.
For the future strategy of the Finish Company it will greatly depend upon its telecoms equipment division NSN (Nokia Solutions and Networks). According to NSN’s chief executive, Rajeev Suri, in his future strategy for the expansion of NSN division, reveal he will not go for any transformational transactions or for any “silly acquisitions”. However that deals boost and strengthen the firm’s balance sheet, with approximately €7.5 billion net cash. But all this happen, when the company is provided by handsome amount by MSFT following the completion of the deal.
In order to boost its telecoms equipment business, the company has also placed its eye on the French networks business, Alcatel-Lucent, but NSN CE has refused to comment on it. But the company in order to grow in this sector may face strong competition, and may hit by lower cost alternatives made in Chinese market, due to which NSN’s sales decreased by 26% on yearly basis in the Q3.
On the other side the company will also strengthen itself through its vast patent portfolio that is bringing under its unit called advanced technologies. This unit of the company will also carry out some R&D functions that could facilitate the company to manufacture consumer products once again in the future. And analyst Sami Sarkamies, at Nordea expects the company will invest € 6 billion in its Patents division to boost its business in future.
But the company mapping business may also provide considerable amount revenue to the company. However the company previously wants to sell the unit to Microsoft but the price disagreement has put down the deal. Nokia Corporation (ADR) (NYSE:NOK) share advanced 1.39% to $8.00 in last trading session.
Leave a Reply