Nokia to buy mapping vendor Navteq in $8.1B deal

Nokia Corp. said it will acquire digital mapping company Navteq in a blockbuster $8.1 billion deal.
The Finnish company plans to spend $78 per share for Navteq, a 22-year-old, Chicago-based outfit. The offer marks a 3-cent premium over Navteq’s Friday closing price, and a 34% markup over the stock’s price a month ago.
Navteq’s data serve as a foundation for in-dash navigation systems and Web-based applications from companies such as Google Inc. and Yahoo Inc. The firm has actively worked to spur activity among mobile location-based developers in recent years, hosting competitions for GPS-enabled offerings at CTIA conferences, for example.
Navteq generated $582 million in revenues last year and counts roughly 3,000 employees in 30 countries.
The announcement marks the biggest move yet in Nokia’s recent spending spree. The industry’s No. 1 handset manufacturer has pocketed a digital music company (the $60 million acquisition of Loudeye), a social networking community (Twango, which was snapped up for a reported $100 million) and a mobile marketing firm (Enpocket, which is being acquired for an undisclosed sum). And Navteq’s technology will support Nokia’s own location-based efforts, which largely stem from the 2006 acquisition of Germany’s gate5 GmbH.
The latest deal is expected to close early next year, and Navteq will operate independently from the parent company out of its Chicago headquarters. It’s likely that Navteq will play a major role in Ovi, Nokia’s ambitious direct-to-consumer play that will house the company’s music, mapping and social networking offerings.
“Location-based services are one of the cornerstones of Nokia’s Internet services strategy,” said Nokia 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. We also look forward to maintaining and enhancing the services and support provided to Navteq’s existing and future customers.”
Investors were less thrilled about the planned tie-up, though, bringing Navteq’s recent climb to an apparent end. Shares of Navteq slid $1.11, or more than 1%, on the news, falling to $76.86. Nokia’s shares fell nearly 2%, falling to $37.25.