ESPOO, Finland – Mobile giant Nokia on Monday announced it has signed a definitive agreement to acquire NAVTEQ for about $8.1 billion on an aggregate basis. The price is about $7.7 billion net of NAVTEQ’s existing cash balance.
The acquisition has been approved by the boards of both companies, but is still subject to regulatory approval and needs to be approved by NAVTEQ shareholders.
The combined company will create a global player in the location-based services market; location-based services have been rapidly expanding into mobile communications devices and also on the Internet.
“Location based services are one of the cornerstones of Nokia’s Internet services strategy. The acquisition of NAVTEQ is another step toward Nokia becoming a leading player in this space,” said Nokia president and CEO Olli-Pekka Kallasvuo. “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.”
After completion of the transaction, NAVTEQ’s current map data business will continue to operate independently, but organizationally will be a Nokia Group company.
The acquisition is expected to close in the first quarter of 2008. Nokia plans to finance the acquisition with a combination of cash and debt, and has secured a commitment on the debt.
Chicago-based NAVTEQ is a provider of comprehensive digital map information for automotive navigation systems, mobile navigation devices, Internet-based mapping applications, and government and business solutions. The company creates digital maps and map content that power navigation and location-based services solutions.
Along with its map expertise, Nokia also acquires NAVTEQ’s customer base and its map data and technology platform. The company also owns Traffic.com, a web and interactive service providing traffic information and content to customers.
NAVTEQ, founded in 1985, generated $582 million in revenues in 2006, and has about 3,000 employees in 168 offices in 30 countries.
