(1 October 2007 10:30 pm)

MUMBAI: Finland headquartered mobile phone giant Nokia today announced a definitive agreement to acquire US navigation-software maker Navteq in a deal worth $8.1 billion.

Under the terms of the agreement, Nokia will pay $78 in cash for each share of Navteq including outstanding options for approximately $7.7 billion net of Navteq's existing cash balance. The acquisition has been approved by the boards both companies.

The navigation area is a fast growing business, and with location-based services expanding rapidly into mobile communications devices, the industry is poised for even further growth. Navteq will continue to operate as an independent operation providing map data platform to navigation industry players. With the Navteq buyout, Nokia aims to further strengthen its location based services offering and boost Nokia's internet services.

Driven by internet and digital convergence, Nokia is expanding its offering to include areas such as entertainment, communities and location based services.

"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," said Nokia president and CEO Olli-Pekka Kallasvuo.