Nokia to Buy Navteq for $8.1 Billion

Nokia Oyj, the world's biggest mobile- phone company, agreed to buy Navteq Corp. for $8.1 billion to gain digital maps of 69 countries and compete with TomTom NV in the market for navigation devices.

Nokia will pay $78 in cash for each share of Chicago-based Navteq, the largest maker of maps used in car-navigation equipment, the companies said in a statement today. Navteq stock, up about 80 percent in the past three months on speculation about a takeover, fell $1.52, or 2 percent, to $76.45 at 4:01 p.m. in New York Stock Exchange trading.

The acquisition, Nokia's biggest, will add maps to the Espoo, Finland-based company's phones after models with cameras and music players fueled a 74 percent increase in profit in the first half of this year. Sales of navigation products will triple to $12.8 billion by 2010, research firm iSuppli Corp. said.

``Nokia is in a rush,'' said Jussi Hyoety, head of research at FIM Securities in Helsinki. ``If they want to be a leading player, the company needs to make purchases.''

TomTom agreed in July to buy Tele Atlas NV, the world's second-largest maker of maps. Tele Atlas shares today had their biggest gain in almost three months in Amsterdam trading on speculation the company may get a higher bid.

Nokia shares lost 49 cents, or 1.8 percent, to 26.17 euros in Helsinki. The stock fell because investors are concerned Navteq is too expensive, Hyoety said.

Navteq, whose clients for maps include Yahoo! Inc., Google Inc. and Microsoft Corp., has been profitable every quarter since going public three years ago. The company had sales of $582 million last year, compared with revenue equal to $58.6 billion for Nokia.

Source: www.bloomberg.com