Nokia is expanding its business by acquiring the world’s leading provider of mapping software, Navteq. Nokia announced that the company is ready to but Navteq for about US$8.1 billion in cash.
One month ago, to grab Navteq and boost its software and services, Nokia was ready to pay $78 in cash for each Navteq share, 34 percent premium over Navteq’s share price, but virtually the closing price is US $77.97 per share. 
The acquisition will help Nokia to improve its mapping services in its mobile phones.
Nokia will have to compete with companies like Apple, whose iPhone comes with navigational software from Google; Garmin Ltd., which makes a wide range of satellite navigation gear used in cars, boats, planes and handheld devices. They are customer of Navteq; and TomTom, which agreed in July to buy Tele Atlas NV, which currently provides mapping service to Nokia.
Nokia stated that the boards of both companies have approved the purchase, which is expected to close in the first quarter of 2008. Nokia will obtain the necessary financing through a mix of cash and debt. The acquisition of Navteq may be a defensive mode for Nokia, so that other companies can not buy it. Other companies like Microsoft, Yahoo and Google are increasing their map-based services.
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