Nokia Corp. , the world's largest maker of mobile phones, today announced that it will purchase digital-map provider Navteq Corp. for $8.1 billion, or $78 a share in cash for each Navteq share, including outstanding options. The deal is one of the company's biggest-ever acquisitions.
Nokia Chief Executive Olli-Pakka Kallasvuo has vocalized his desire to capitalize on the fast-growing navigation domain. Research firm Strategy Analytics alleges that the market for consumer location-based services in Western Europe alone is projected to ascend to $1.25 billion by the end of 2011 from $191 million in 2006.
The purchase represents the company's expanding headway in the mobile-services arena, as they are already designing products around games and music industries. As part of their new direction, Nokia recently unveiled Ovi, a new Internet-based service provider, as well as navigation devices including the N6110 Navigator and the N95 smart phone.
Since the announcement of the deal before the open, NVT shares opened down 1.5% at $76.80 where they have lingered, topping out at $78, just $1.27 down from its annual high. Nokia shares were last down 0.65% at $37.68, dawdling around their annual high of $38.06.
In related news, Garmin was cut to sector performer from outperformer by CIBC, which claimed the company should have moved on Navteq before Nokia. GRMN is down 9.8% at $107.66.