FIH Mobile Ltd (富智康) — a subsidiary of Foxconn Technology Group (富士康) — yesterday announced that it has partnered with Finnish company HMD Global Oy to purchase smartphone assets under the Nokia brand from Microsoft Corp for US$350 million.
Under the agreement with Microsoft smartphone subsidiary Nokia Technologies Ltd, FIH is to pay US$330 million and HMD is to pay US$20 million for the assets, FIH said in a filing with Hong Kong Exchanges and Clearing Ltd.
The announcement came two days after FIH reported a net loss of US$3.84 million in the first quarter, down significantly from a net income of US$65.28 million recorded over the same period last year, due to the sluggish smartphone sales of its major clients.
Photo: AFP
As part of the agreement, FIH said its subsidiary TNS Ltd, Nokia Technologies and HMD have also agreed to work together to expand Nokia’s global mobile phone and tablet sales.
FIH said it would support TNS and HMD with sufficient resources to boost sales of Nokia products.
HMD is to be in charge of selling feature phones, while FIH is to manufacture the product and help expand the business to emerging markets through its logistics and distribution networks, FIH said.
Microsoft also released a statement, saying that as part of the deal, FIH would also acquire Microsoft Mobile Vietnam — the company’s handset manufacturing facility in Hanoi, Vietnam.
About 4,500 employees are to transfer or join FIH or HMD in compliance with local regulations, Microsoft said.
The US company said it would transfer all of its feature phone assets, including brands, software and services, care network and other assets to the two companies.
FIH and HMD is also to manage customer contracts and critical supply agreements, Microsoft said.
The companies are expected to complete the transaction in the second half of this year, subject to regulatory approvals and other closing conditions.
Although the US company is to sell its feature phone assets to FIH and HMD, Microsoft said it would continue to develop Windows 10 mobile devices and support Lumia smartphones, such as Lumia 650, Lumia 950 and Lumia 950 XL.
Microsoft is also to continue to work with original equipment manufacturers, such as Acer Inc (宏碁) and HP Inc for smartphone products, it said.
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