Nokia's Navteq deal gets go ahead

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Nokia today announced the European Commission has given unconditional approval for Nokia's planned acquisition of Navteq. Nokia has now received all the necessary regulatory approvals and expects to close the deal in the next 5 days. Nokia is acquiring Navteq for $8.1 billion.

Nokia has said that Navteq will operate independently as a separate unit within Nokia in order that 'current and future customers continue to have a dedicated and strengthened unit serving them' (in other words being able to serve other customers who may be competitors of Nokia).

Nokia believes that location will be a corner stone of future mobile and Internet services. Navteq, or mores specifically its GIS data (maps plus geo-meta-data) represent a core building block in this future and having direct control puts Nokia in a very strong position to fully exploit the potential.

One area that is drawing particular attention is location aware advertising on mobile devices. The idea being that if first generation context senstive ads have worked well (e.g. Google AdWords / AdSense) then second generation context sensitive ads (that can call upon location context) will work even better.

Clearly the Navteq acqusition can be seen, at least in part, as a competitive response to Google with its Maps and Advertising products.

Nokia is paying a lot of money for Navteq (which had revenues of $581 million in 2006). However in the years to come I suspect we'll look back with hindsight and think this was an attractive price and a shrewd move on Nokia's part.

From the press release:

"We welcome this news. NAVTEQ will play a key role in our Internet services strategy with world-leading maps and navigation industry expertise, a strong customer base and industry-leading map data and technology platform offering the broadest geographical coverage," said Olli-Pekka Kallasvuo, President and CEO, Nokia.
"We are pleased that the Commission has reached the same conclusion we have regarding NAVTEQ's ability to continue providing broad access to all our customers," said Judson Green, President and CEO, NAVTEQ.  "We believe NAVTEQ will be better positioned to serve all our customers under Nokia ownership."

I would also remind you of what Nokia CEO Olli-Pekka Kallasvuo said around the intial announcement last year:

"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. By joining forces with Navteq, we will be able to bring context and geographical information to a number of our internet services with accelerated time to market. We also look forward to maintaining and enhancing the services and support provided to Navteq’s existing and future customers."

Thanks to IntoMobile for the heads up.