The second giant map provider acquisition announced that is likely to be closed in the first quarter of 2008.
Nokia and NAVTEQ have announced a definitive agreement for Nokia to acquire NAVTEQ. Under the terms of the agreement, Nokia will pay $78 in cash for each share of NAVTEQ including outstanding options for an aggregate purchase price of approximately $8.1 billion (€5.7 billion), or approximately $7.7 billion (€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.
The navigation area is a fast growing business, and with location-based services expanding rapidly into mobile communications devices, the industry is poised for even further growth. 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 is a leading provider of comprehensive digital map information for automotive navigation systems, mobile navigation devices, Internet-based mapping applications, and government and business solutions. 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 $582 million and has approximately 3,000 employees located in 168 offices in 30 countries.
Nokia is the world's largest mobile device manufacturer with more than 900 million people using a Nokia mobile device around the world. Driven by Internet and digital convergence, Nokia is expanding its offering to include areas such as entertainment, communities and location based services. Shipping with the GPS-enabled Nokia N95 multimedia computer, the Nokia Maps solution is one of the most advanced location based services in the marketplace today.
"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 Olli-Pekka Kallasvuo, President and CEO, Nokia. "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 Green. "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, said "Nokia's offer of $78 per share reflects a very attractive valuation for NAVTEQ's stockholders, representing a 34 percent 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.
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