3/31/2008 11:31:00 AM
EC investigates Nokia’s £4bn bid
The European Commission has placed a potential obstacle in front of Nokia’s proposed takeover of Navteq with the announcement last Friday that it would conduct an in-depth review of the proposed bid.
Nokia made a £4bn bid for the digital mapping company in October last year, a move that surprised some analysts who described the potential deal as ‘expensive’.
An initial investigation by the European Commission raised ‘serious doubts’ about the effect of the proposed purchase on Nokia’s competitors.
With only Navteq and Dutch firm Tele Atlas producing navigable digital maps which offer complete coverage of Europe and North America, the Commission is concerned about the cost of digital maps for other companies providing navigation services on mobile handsets, or that access to them would be limited.
Nokia’s chief financial officer Rick Simonson said: ‘We have listened to the Commission's concerns, and look forward to finding a common understanding that will enable the transaction to be closed.
‘Nokia remains strongly committed to this acquisition, which will play a key role in our internet services push,’ Simonson added.
President and chief executive officer of Navteq Judson Green said he was ‘enthusiastic’ about the possible acquisition. He said: ‘We will continue to provide any support we can in Nokia's ongoing discussions with the European Commission.’
The Commission has until 8 August to make a final decision on the transaction.