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Nokia Will Receive $97M From Ericsson For 2019 Claim Settlement

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Nokia Will Receive $97M From Ericsson For 2019 Claim Settlement
  • Telefonaktiebolaget L M Ericsson (NASDAQ: ERIC) has reached a settlement agreement with Nokia Oyj (NYSE: NOK) on a 2019 U.S. DOJ and SEC investigation into Ericsson’s violations of the U.S. Foreign Corrupt Practices Act (FCPA).
  • The investigations were related to criminal charges of books, records, and internal controls violations of the FCPA and bribery.
  • Ericsson will pay a penalty of $97 million (€80 million) for uncertainty, risk, and expense from the prolonged and complex litigation.
  • The settlement will affect Ericsson’s Q2 2021 EBIT and cash flow by €80 million and €26 million, respectively.
  • The remainder of the settlement amount will be made in similar installments in 2022 and 2023, impacting the cash flow.
  • The settlement amount will be recorded as ‘Other Operating Expenses.’ Further details of the terms of the settlement are confidential.
  • Price action: NOK shares traded lower by 1.42% at $4.86, while ERIC shares traded higher by 0.15% at $13.31 in the premarket session on the last check Wednesday.
 

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