Nokia to Buy Navteq for $8.1 Billion
Nokia has agreed to buy digital map supplier Navteq for $8.1 billion in cash as it seeks to expand its cellphone-based navigation offerings, the companies announced Monday.
Nokia, the world’s largest cellphone maker, said it will acquire Navteq for $78 a share, which is only 3 cents above Navteq’s closing share price on Friday. But Navteq’s stock has risen sharply in recent weeks amid rumors that it was a takeover target.
Once rumor became reality, investors seemed a bit disappointed. Navteq’s shares fell about 1.7 percent in early trading Monday.
Navteq’s major customers are automakers and auto suppliers, who license its databases for dashboard navigation systems.
Some had theorized that Google could be interested in buying Navteq; others suggested that a private equity firm might be circling the company.
In the end, it was Nokia of Finland that struck a deal. Monday’s sale price reflects a 34 percent premium over Navteq’s share price a month ago, Nokia said Monday. The deal is expected to close in the first quarter of 2008.
Nokia and its competitors are looking for new sources of revenue, and mapping technology has become an increasingly popular feature.
Nokia sees the Navteq deal as a way to accelerate its mobile map-related offerings. “By joining forces with Navteq, we will be able to bring context and geographical information to a number of our Internet services with accelerated time to market,” Nokia chief executive Olli-Pekka Kallasvuo said in a press release.
A snarkier assessment the deal came from a MarketWatch commentary, which served up this headline: “Nokia bets men will spend anything to avoid asking directions.”
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Nokia, the mobile phone manufacturer based in Nokia, Finland, has negotiated the takeover of Chicago, United States Geographic Information Systems software development company Navteq for US$8.1 billion.

Nokia are paying $78 per share in Navteq, who employs 3,000 people and operates 168 offices spread across 20 countries. Nokia, meanwhile, is the world's largest mobile phone manufacturer.

The price comes in at only three cents a share more than current stock market prices, but these prices have recently risen steeply after rumours surfaced that the company may be subject to a takeover deal. However, share prices fell 1.7% after the deal was confirmed as fact.

“Location based services are one of the cornerstones of Nokia's Internet services strategy. By joining forces with Navteq, we will be able to bring context and geographical information to a number of our Internet services with accelerated time to market,” said a statement by Olli-Pekka Kallasvuo, Nokia's chief executive. Meanwhile, MarketWatch had a slightly different take on events, using the headline “Nokia bets men will spend anything to avoid asking directions.”