Nokia to acquire NAVTEQ for EUR 5.4 billion — MobileMonday Global: Industry News

^{3,000 employees in 168 offices in 30 countries} Nokia to acquire NAVTEQ for EUR 5.4 billion

1 Oct 2007 at 14:24 GMT Timo Poropudas

Nokia made a bold move in location based services business by acquiring NAVTEQ, a leading provider of comprehensive digital map information. The combined entity would create a leading global player in the fast growing location based services market.

Nokia and NAVTEQ today announced a definitive agreement for Nokia to acquire NAVTEQ. Under the terms of the agreement, Nokia will pay USD 78 in cash for each share of NAVTEQ including outstanding options for an aggregate purchase price of approximately USD 8.1 billion (EUR 5.7 billion), or approximately USD 7.7 billion (EUR 5.4 billion) net of NAVTEQ existing cash balance. The acquisition has been approved by the board of directors of each company and is subject to customary closing conditions including regulatory approvals and NAVTEQ shareholders' approval.

According to Nokia press release NAVTEQ brings a number of key assets to Nokia: a great team with 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 will continue to provide the most advanced and flexible map data platform to navigation industry players. With NAVTEQ, Nokia will further strengthen its location based services offering and bring to market the most innovative, context aware Nokia Internet services with accelerated time to market.

NAVTEQ also owns Traffic.com, a web and interactive service that provides traffic information and content to consumers. The Chicago-based company was founded in 1985, generated 2006 revenues of USD 582 million and has approximately 3,000 employees located in 168 offices in 30 countries.

"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 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".

"Nokia's unique vision for location based services aligns perfectly with NAVTEQ's vision to enable everyone to find their way to people, places and opportunities on mobile communications devices, cars, desktop computers and in all the other places that are important to them," said NAVTEQ President and CEO Judson Gree. "It's really exciting to imagine what we can achieve by combining our location experience with the resources of a company that has a customer base of more than 900 million people."

In commenting on the transaction, Christopher Galvin, Chairman of the Board of NAVTEQ, and former CEO of Motorola, said "Nokia's offer of USD 78 per share reflects a very attractive valuation for NAVTEQ's stockholders, representing a 34% premium to our stock price of one month ago. In considering the offer, we approached other potential purchasers about their possible interest in NAVTEQ and our Board took those contacts and discussions into account in determining that Nokia's proposal was the best opportunity available to maximize value for our stockholders."

After completion of the transaction, NAVTEQ's current map data business will continue operationally independent, but organizationally a Nokia Group company. Judson Green will report directly to Olli-Pekka Kallasvuo. This will ensure that NAVTEQ's current and future customers continue to have a dedicated and strengthened unit serving them as before with digital map information for automotive navigation systems, mobile navigation devices, Internet-based mapping applications, as well as government and business solutions.

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.

Last week NAVTEQ entered into an agreement with Qualcomm. Google is a very large customer for company.