Exploring Local
Mike Dobson of TeleMapics on Local Search and All Things Geospatial

The witching hour is approaching.

December 6th, 2007 by MDob

As you may know, the EU has decided to take a second look at TomTom’s acquisition of TeleAtlas indicating that the European Commission had raised “serious doubts” that the deal could result in lessened competition in its markets for PNDs. It is expected that Nokia will have less trouble with the EU on the Navteq deal, but who knows?

Today, the U.S. FTC indicated that the Nokia/Navteq deal had cleared Hart-Scott-Rodino Antitrust Act of 1976. The Act was passed to give the government time to decide whether various mergers or acquisitions could be construed as anti-competitive. Since the government has let Nokia off the hook, it looks like the deal will go through,

Of course, if you delve into the files on the Nokia/Navteq deal you can find some fascinating reading, especially the following exhibit. (The bolded sections were emphasized by me).

EX-99.2 • Miscellaneous Exhibit
GENERAL
What is NAVTEQ’s rationale for this transaction? Why not continue to pursue an independent strategy?
• We believe the transaction is the best way to maximize value for our stockholders. The offer represents a 34% premium to the stock price of one month ago.
• NAVTEQ has been the subject of takeover rumors for a number of months, and we believe that our recent stock price reflected a significant amount of that deal speculation.
• NAVTEQ could certainly have continued independently, but management feels this transaction
(1) enables the company to invest more aggressively in its products and services,
(2) offers an exciting source of new content; and
(3) brings several longer-term opportunities, such as location-based services and advertising, into sharper focus.

1. Nokia ownership increases NAVTEQ’s flexibility to invest
• The acquisition enables NAVTEQ to continue to invest in the database to ensure data quality, as we expand into new geographies and introduce new content.
2. Nokia offers an exciting source of new map content for the benefit of all customers.
• NAVTEQ’s pedestrian programs will be expanded in existing countries and launched in new geographies.
Nokia handsets may generate probe data that will accelerate development of NAVTEQ traffic services and thereby enable NAVTEQ customers to deploy new products around the world.
Nokia’s user community, which is over 900 million strong, could become a rich source of information on map accuracy and points of interest.3. LBS and location advertising opportunities become larger and more tangible
Nokia and NAVTEQ are both interested in advancing the advertising model as an alternative for the commercialization of products and services for all NAVTEQ customers
• In addition, Nokia’s installed base represents enormous target for advertising & offboard services.

• Importantly, Nokia’s strategic intent complements NAVTEQ’s approach and is non-threatening to NAVTEQ’s existing customers.
• Nokia’s primary interest is in pedestrian applications on connected devices (handsets).
• NAVTEQ’s high quality map data and content will continue to be broadly available.

Wow, this looks like trouble for the big online-brands. I understand that several of these companies had complained to the government about the competition issues raised by the Nokia deal. Guess their complaints were not considered “substantial”

On the other hand, if one of these companies is having second thoughts about bidding, it will now need to do so before the Navteq Special Meeting of the Stockholders to approve the merger on December 12, 2007. This could get interesting. Stay tuned.

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Posted in blah, Navteq, Nokia, Personal Navigation, TeleAtlas, TomTom


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