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EC examines Nokia bid for Navteq
Europe looks into navigation tie-up

By Reuters

Published: Monday 31 March 2008

The European Commission has said it has opened an in-depth investigation into plans by Nokia to buy US-based digital-map supplier Navteq for $8.1bn.

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The deal, which would be the world's top mobile-phone maker's largest-ever takeover, won approval from the US Federal Trade Commission in December.

The European Commission noted that Navteq is one of two producers of navigable digital maps, a crucial input for navigation services that can be distributed by mobile phone.

The EC said in a statement: "The Commission's initial market investigation has indicated that the proposed merger raises serious doubts with regards to... competition concerns."

A decision to open an in-depth inquiry does not prejudge the final result of the investigation, it added.

The statement said: "The Commission now has until 8 August 2008 to take a final decision on whether the proposed transaction would significantly impede effective competition within the European Economic Area or a significant part of it."

The investigation will focus on assessing whether the transaction would increase the costs of navigable digital maps for other companies providing navigation services on mobile handsets or limit their access to these maps and, as a consequence, harm consumers, the Commission added.

The operation raises some issues similar to those involved in the proposed acquisition of Tele Atlas by TomTom, a Dutch company manufacturing portable navigation devices and selling navigation software for mobile phones, the Commission said.

The proposed TomTom-Tele Atlas transaction is under review by the Commission, which on Friday extended the deadline for its decision on that deal.

The Navteq transaction would give Nokia - which is looking for new revenue sources as the mobile-phone industry matures - a stronghold in the navigation business, one of the fastest-growing segments in the technology industry.