Nokia and NAVTEQ have announced a definitive agreement whereby Nokia will pay $78 in cash for each share of NAVTEQ including outstanding options for an aggregate purchase price of approximately $8.1 billion (euro 5.7 billion).

 

According to a company press release, the acquisition has been approved by the board of directors of each company.

 

NAVTEQ is undeniably a leading player in the field of electronic mapping, which enables in-vehicle navigation devices and a new generation of mobile-phone applications used for shopping, emergency services and advertising.

 

As Nokia looks to expand its business into the services arena, the acquisition of NAVTEQ makes sense, especially in light of the Finnish mobile phione maker’s stated desire to expand into services.

 

Nokia still derives most of its revenue by selling handsets — in fact Nokia reportedly sells one out of every three handsets in the world today. The move towards adding such critical applications as GPS or location-based services is clearly designed to make Nokia the “stickier” choice for consumers looking for a mobile device that can deliver context and geographical information to the company’s growing stable of Internet services.

 

"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.

 

NAVTEQ is also the owner/operator of the Web site Traffic.com, an interactive service that provides traffic information and related content to consumers.

 

Upon completion of the transaction, NAVTEQ's current map data business will continue to operate independently, but will be folded into the Nokia corporate organization as a Nokia Group company.