Nokia and NAVTEQ 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.

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.

"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.

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. Nokia anticipates that the acquisition would not impact its share buy-backs under the current mandate, or its future cash distribution strategy in terms of dividends and share buybacks which is subject to theshareholders' approval. The acquisition is expected to be dilutive to Nokia earnings in 2008 and 2009 on a reported basis. However on a cash basis Nokia expects it to be only slightly dilutive in 2008 and slightly accretive in 2009.


Technorati Tags: Nokia, NAVTEQ, Mobile Navigation