EU to deepen investigations on Nokia-Navteq deal said insiders

EU to deepen investigations on Nokia-Navteq deal said insiders
The European Commission is set to deeper its investigation into Nokia pending $8.1 billion acquisition of Navteq, according to Dow Jones Newswires, which quotes “three people familiar with the deal.” The European Commission has disclosed a March 28 deadline to either clear the Nokia Navteq deal or launch an in-depth investigation.

Since the European Commission is currently conducting an in-depth investigation into TomTom bid for Navteq rival Tele Atlas it would be surprising to see the Commission clear the Nokia bid on Navteq next week. Indeed, the Commission has recently sent a so-called “statement of objections” to TomTom regarding the acquisition of Tele Atlas. A Statement of Objections is a formal step in Commission antitrust investigations in which the Commission informs the parties concerned in writing of the objections raised against them (read more here).

There have been many objections raised by market players. Among them the price of map data, the fair availability of this data and the confidentiality of the information map data providers gets from their customers, especially those which are direct competitors to TomTom and Nokia. All these concerns are real and the European Commission – unlike the U.S. antitrust authorities which cleared both deals in a matter of weeks – is taking a serious look at it.

However both bids have not been made with the same purpose. TomTom’s strategy behind this bid is to leverage its million of PND customers in order to improve the Tele Atlas map data with technologies such as Maps Share and others (read more here). Obviously this acquisition will offer the Dutch company new growth opportunity, especially if the PND market is slowing down due to either saturation or a stronger competition from mobile phones.

For Nokia this deal is essentially about securing the availability of worldwide map data to achieve its location-based services strategy. In one case there is a synergy, in the other case there is the reaction to buy the only remaining worldwide provider of map data. The fact Nokia started its negotiation with Navteq seven days after TomTom announced its bid on Tele Atlas is a clear indication of the reactive nature of the Nokia bid.

While there is a high probability both deals will get approved, there is also a high probability the conditions imposed by the European Commission will be more constraining than what Nokia, TomTom and the industry as a whole were initially thinking.

Thursday, March 13th 2008

Nav & Telematics | Sport and Outdoor | Location Based Services | Tech & Innovation | Market Data | Finance & Legal | People and Jobs | Voices of the industry | Press Releases