Hot business deals were happening today in cold Helsinki, Finland. Nokia and GPS maker Navteq announced today a
definitive agreement for the purchase of Navteq, valued at $8.1 billion.
Nokia will pay $78 in cash for each share of Navteq including outstanding
The acquisition is nearly finalized, having been approved by the board of
directors of each company and now only awaits NAVTEQ shareholder approval.
The cell-phone GPS market has been rapidly growing, with many users looking to
find directions on-the-go with their cell phones. Nokia says that Navteq
will provide the "best-in-world maps and navigation industry expertise, a
strong customer base and an industry-leading map data and technology platform
with the broadest geographical coverage."
Navteq was found in 1985 and is based out of Chicago, Illinois. It has
grown very large, with over 3,000 employees in 168 offices in 30 countries
worldwide. It posted 2006 revenues totaling $582 million USD.
Navteq owns Traffic.com, an interactive web service that provides traffic
information and content to consumers. The company also is a leader in
providing mapping and GPS solutions to businesses and the government.
Nokia announced that Navteq will continue to support its existing
customers. Navteq will also add new capabilities to the Nokia Internet
Nokia hails itself as "the world's largest
mobile device manufacturer" and claims to have over 900 million customers
using its mobile offerings worldwide.
Nokia is looking to solidify its position as the mobile leader by expanding its
mobile GPS offerings, including adding Nokia Maps, a GPS service to its new
phone lines. The Nokia N95 multimedia computer, which went
on sale earlier this year, comes preloaded with the software and also
features 2.6" QVGA screen, 160MB of internal memory, microSD slot for
memory expansion, 3G, WiFi and Bluetooth. An 8 GB version has also
Olli-Pekka Kallasvuo, President and CEO of Nokia, hailed the acquisition as a
major victory. "Location based services are one of the cornerstones of
Nokia's Internet services strategy,” said Kallasvuo.” The acquisition of NAVTEQ
is another step toward Nokia becoming a leading player in this space. 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. We also look forward to maintaining and enhancing the services and
support provided to NAVTEQ's existing and future customers."
The move will likely strengthen Nokia in the long term, but
may dilute earnings for Nokia in 2008 and 2009 -- a possible concern to
Still, Jari Honko, an analyst at eQ Bank in Helsinki, sees the move as wise.
He called Navteq "the most significant player in its field" and
added, "It makes a lot of sense. This is one of the areas that
should become extremely important in the future. ... Nokia could very well
build one of its core services around it."
The acquisition comes at the same time as Nokia's recent launch of a new Apple
iPhone-bashing campaign, as
covered by DailyTech, which
derides the Cupertino-firm's attempts to lock
its phones to the AT&T network and "brick" phones that do not
comply or have third party apps installed.
The acquisition marks one of the largest technology business acquisitions of
quote: DailyTech needs to improve in Geography