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Nokia Buys Navteq for $8.1 Billion

Posted by ryuzaki0 on from the better-to-track-you-with-my-dear dept.

mytrip writes to mention that Nokia has agreed to buy Navteq, Chicago-based maker of digital mapping and navigational software, for $8.1 billion. "Nokia's president and chief executive, Olli-Pekka Kallasvuo, said that location-based services were a cornerstone of Nokia's Internet services strategy, which is part of an overall plan to expand beyond the production of cellphones into user services like photos, video, music and games."

12 of 77 comments (clear)

  1. Google Maps et al affected? by trickonion · · Score: 2, Insightful

    I know Google Maps (and I believe others) use data provided by Navteq (so the bottom of the maps say). I wonder if this purchase will affect them in any way?

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    I got you an Andes mint, but it melted in my pocket
    1. Re:Google Maps et al affected? by SpaceLifeForm · · Score: 4, Interesting

      No. But it may make a future acquisition by Google more attractive.

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      You are being MICROattacked, from various angles, in a SOFT manner.
    2. Re:Google Maps et al affected? by 2ms · · Score: 5, Informative

      Google acquiring Nokia? That's a laughable notion at best. Nokia is the largest wireless network hardware and phone company in the world. Some would say they're sitting on top of the biggest goldmine there is in tech or least consumer electronics. And they only seem to big extending the gap with their competitors more and more (look at Motorola's last quarter vs Nokia's). For Americans here who don't know, by the way, Nokia is far and away the largest builder of the networks wireless services are provided by -- phones are only the smaller part of their business, yet they are the largest phone maker in the world too.

    3. Re:Google Maps et al affected? by everphilski · · Score: 4, Interesting

      Highly doubtful. Check out Nokia's stock ticker ... just the value of Nokia's stock is 98% of Google's stock, not to mention Nokia holds a lot more **physical** assets than Google. Similar cash-at-hand, much more revenue per year. If Google would want to make a purchase of Nokia (Nokia being a healthy company), they would have to up the ante and offer the stockholders **more** than the company is worth. Sure, they can take out a loan, but they would essentially run the company dry. The interest on a few hundred billion dollars (Nokia's stock alone is worth 120B, Google's cash-at-hand is less than a tenth of that) a year would be billions of dollars a year. Google can't afford that. To put it another way, their revenue last year was 13B. The interest on a loan for Nokia would probably run a third to half that.

  2. Internet tablets by cerberus4696 · · Score: 4, Interesting

    This raises some interesting possibilities for where nokia's going with the next installment in their line of internet tablets (the Nokia 770/800/rumored successor to both). Navteq's software already runs on the platform, so it may be that nokia's thinking of integrating it more fully into their internet tablets (the next one is rumored to have built-in GPS).

    1. Re:Internet tablets by costas · · Score: 2, Informative

      I have an N95 and just used it recently to live in a strange city for two days. Yes, it's a killer app; having the navigation device on you (instead of the car) means you can make impromptu plans work ("I'd like a coffee; wonder where the nearest cafe is; oh, 5 mins away, no prob"). Having Google on the same device just plain rocks.

      Now, it's not perfect: GPS drains the battery down something fierce (which is not great to begin with) and Nokia could have done a better job interfacing GPS to the rest of the phone (why can I cut and paste a full address to search in the Maps app? instead I have to break down things to street number, street name, city and zip; why? the N95 is powerful enough to guess that format by itself...). Still though, the concept is compelling; Nokia has the right idea.

  3. Killer App by microbee · · Score: 3, Interesting

    I have a Nokia 6682. I bought a bluetooth GPS receiver for $60 and downloaded Route 66 (for "free") on it and it has been a fantastic GPS device for me. I would never drive without such a phone anymore. I actually like it more than any dedicated GPS device which for a decent one could easily take $500 as mounting a normal GPS would be a pain (and too easy to attract thieves to break your window and take it). With a cell phone based GPS, it's easily attached to the vent (holder included with the receiver), and really portable.

    If Nokia provides gps software out of the box, it definitely will be the biggest factor for my purchase decision.

  4. The press release, Tele Atlas and more by Lord+Satri · · Score: 4, Informative

    Here's the official press release. There's additional articles on Bloomberg and TradingMarkets.

    This news was predicted after TomTom bought Tele Atlas last July, NAVTEQ's main competitor.

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  5. Re:8.1 Billion with a B? by tomk · · Score: 3, Interesting

    Although I'm sure you were joking when you said "cash", here's an idea of how that much cash would look.

    http://www.guardian.co.uk/Iraq/Story/0,,2008189,00.html

    Considering that this is 2/3 as much ($8bn vs $12bn) you could scale down and say that if this were presented as packages of $100 bills, it would weigh approximately (363*2/3) = 242 tons.

    It's somewhat annoying to measure cash in "tons of $100 bills" and to think that none of it going to me ;(

  6. Re:NavTeq made out like bandits here. by iamwahoo2 · · Score: 2, Interesting
    I am not a big time investor, but I have owned shares in Navteq for some time. And as a shareholder, I am officially pissed off!!

    Am I surprised that someone bought them? No. But I had expected more than a $0.03 premium!! This whole deal stinks of insider collusion, and I for one intend to vote 'No' on this acquisition with my shares.

    So explain to me exactly why I should be patting myself on the back? If I wanted to sell at $78, I could have sold it at market price on Friday for that. I and every other shareholder just took it up the butt from the Board of Directors.

  7. Could be a big problem for GPS systems by markdj · · Score: 2, Interesting

    A significant number of GPS systems that run on phones that compete with Nokia use Navteq maps. Could or would Nokia stop licensing Navteq maps to non-Nokia phones? I find this troubling.

  8. Re:NavTeq made out like bandits here. by theskipper · · Score: 3, Insightful

    Fwiw, a few points for perspective:

    After the Tom-Tom purchase of TeleAtlas, Navteq almost doubled from July (wow!): http://clearstation.etrade.com/cgi-bin/details?Symbol=NVT&csize=10&PositionId=3072161788&Event=peek&period=d.

    You hit a home run because you owned a severely undervalued stock. A real value was applied to their nearest competitor and investors compared their market caps along with a premium. It's standard recognition of price disparity that all investors look for.

    As far as the shareholders go, anyone who bought at the last peak in early '06 (around $51) still managed a gain of over 50%.

    Btw, now is usually a good time to sell and book the gain. There will be a slight discount to the buyout price which represents the risk of the deal falling through. For a percent or two it's usually not worth waiting for the arbitrage to settle out.

    Congratulations on a great trade.