Nokia, the worlds largest cell phone supplier, announced on Tuesday that it has signed an agreement to purchase music distributor Loudeye Corp. for $60 million.
The Finnish mobile phone manufacturer will pay $4.50 per share to acquire the firm in hopes of rounding off its digital entertainment offerings. The firm currently offers phones and electronic devices with playback capability, but the move will give them the ability to offer digital-music as well.
Music is a key experience for Nokia, said Anssi Vanjoki, executive vice president and general manager of Nokia's Multimedia department. Loudeye brings a number of key assets to Nokia, including a substantial content catalogue and a robust service platform that will help us to achieve this objective.
Loudeye powers many of the European digital music stores. In Europe, 37.4 million consumers will pay for digital music by 2011, according to Jupiter Research, however they mention that it is a currently a low-margin business at best for digital music retailers, with high fixed. Loudeye presense is limited in the United States, however, where MusicNet is dominant.
Nokia will make an offer to shareholders after agreeing the deal with management. The deal is expected to be completed in the fourth quarter of 2006, it said.