Who Will Bail Nokia Corporation (ADR) (NOK)?

The Nokia Siemens Network price tag was significantly lower than analysts were expecting. “We also believe Nokia is acquiring this asset at a very attractive price, well below what an initial public offering or trade sale could bring in the future,” Liberum Capital analysts said in a research note.

Microsoft/Nokia “love story”

Nokia has been engaged in a deal with Microsoft to sell smartphones based exclusively on the Windows Operating system, as a result, Nokia brought to the world the successful Lumia series. Furthermore, last month Nokia introduced the Lumia 925, which runs on Microsoft’s Windows 8. Moreover, Nokia accounts for nearly 80% of all Windows Phone sales.

I truly believe the “love story” between Microsoft and Nokia makes total sense as Microsoft is seeking to bolster its wireless business. However, the critics of the venture claims both companies failed in the past–Nokia with its Symbian operating system and Microsoft with its Surface tablet.

Nokia and Microsoft already have a close partnership, with the Espoo, Finland-based company relying on the U.S. software maker for operating-system technology. The agreement between the companies is based on the platform that Microsoft will receive a running royalty from Nokia for the Windows Phones.

The foolish bottom line

I certainly think Nokia is a great buyout candidate. If Microsoft does indeed take over Nokia that will be a life saver for Nokia. On the other hand, Nokia is so far behind Android and Apple and it will take a heavy investment and perhaps years to play catch up. To conclude, if one of the two options materialize, spinning off the phone division or becoming a target company for a buyout, Nokia investors will finally cash out on a long, draining investment.

The article Who Will Bail Nokia? originally appeared on Fool.com and is written by Yaniv Hirsch.

Yaniv Hirsch has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Yaniv is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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