European Commission to further evaluate Navteq, Nokia transaction

By Lisa Kerner

Charlotte, N.C., March 28 - The European Commission has opened an investigation into Nokia Corp.'s proposed acquisition of Navteq Corp. after an initial market study indicated the proposed merger "raises serious doubts with regards to vertical competition concerns," according to a statement released by the commission.

The commission has until Aug. 8 to determine if the transaction would significantly impede effective competition within the European Economic Area or a significant part of it, the statement said.

According to the commission, Nokia produces mobile phone handsets and Navteq is one of two producers of navigable digital maps, "a crucial input for navigation services that can be distributed via mobile handsets."

The Nokia/Navteq merger raises similar issues to the proposed acquisition of Tele Atlas by TomTom, which is currently under review by the commission.

"We have engaged in an open and constructive dialogue with the commission in order to find agreement on the acquisition of Navteq," Nokia executive vice president and chief financial officer Rick Simonson said in a company news release.

"We have listened to the commission's concerns, and look forward to finding a common understanding that will enable the transaction to be closed," Simonson added.

Navteq stockholders approved the company's merger agreement with Nokia at a special meeting in December.

As previously reported, Nokia agreed to acquire Navteq for $78 cash per share in a transaction valued at about $7.7 billion net of Navteq's existing cash balance. The merger was slated to close in the first quarter.

Once the merger is complete, Navteq's current map data business will continue to operate independently but as a Nokia Group company, a prior news release said.

Chicago-based Navteq provides digital map information for automotive navigation systems, mobile navigation devices, internet-based mapping applications and government and business solutions. Navteq also owns Traffic.com.

Nokia manufactures mobile devices and mobile networks. The company is based in Espoo, Finland.

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