and Bloomberg (click here to read article, the world's top cellphone maker Nokia is in talks to buy digital map supplier Navteq for $8.1 billion in cash.
Nokia will pay $78 a share, the companies said in a statement issued on the Hugin newswire. The bid is 34 percent higher than Navteq's price a month ago, the companies said. Navteq closed at $77.97 on Sept. 28.
The acquisition would give Nokia -- which is looking for new revenue sources as the cellphone industry matures -- a stronghold in the navigation industry. With a market value of $7.6 billion, Navteq would be one of Nokia's largest takeovers. Nokia and Navteq were deep in talks on Sunday night. The two firms have been in discussions over the past few weeks, but it was still possible the talks could crumble over last-minute issues.
Nokia declined to comment, and Navteq was not immediately available for comment.
Shares in Nokia were 1.3 percent lower at 26.31 euros by 0807 GMT (4:07 a.m. EDT), underperforming softer European technology index. "In the longer perspective it is good for Nokia, but it could dent the shares in the near term," said eQ analyst Jari Honko.
Nokia had in cash and other liquid assets 8.3 billion euros at end-June, but it has shied away from major takeovers in the past.
"Buying Navteq would be in line with Nokia's plans. Navteq's position is pretty strong," said OKO Bank analyst Hannu Rauhala. "Navigation markets are just starting up." Navteq has been seen as a takeover target since TomTom, the world's top maker of car navigation devices, offered 1.8 billion euros ($2.55 billion) in July for Navteq's only big rival, Tele Atlas.
Last month, Nokia agreed to buy Boston-based marketing company Enpocket to add technology for placing advertisements through text messages and e-mail. The mobile advertising market is dominated by Google Inc. and Yahoo! Inc. Global sales are estimated to rise to $11.4 billion by 2011 from $2.17 billion currently, according to Informa Telecoms & Media Group. Google and Microsoft have also been touted in the media as potential buyers of Navteq. Nokia bought into the navigation industry last year when it acquired German software firm Gate5, which uses map data from providers like Tele Atlas and Navteq. Navigation is one of the fastest growing segments in the technology industry and many market followers see still huge untapped potential in the market.