Nokia's Navteq Acquisition Faces In-Depth EU Probe

European Union regulators started an in-depth probe into plans by Nokia Oyj, the world's biggest mobile-phone maker, to buy Navteq Corp. over concern the deal will hurt competition in the personal navigation market.

The European Commission, the antitrust authority for the 27- member EU, said in a statement today that it will rule by Aug. 8 on Nokia's $8.1 billion purchase. Nokia said it remains ``strongly committed'' to the acquisition of the world's largest digital mapping company.

``It may diminish the chances of the deal going through,'' Greger Johansson, an analyst at Redeye AB in Stockholm, who recommends holding Nokia stock, said in a telephone interview. ``It's a small acquisition and isn't that important for Nokia. It seems like the European Commission is scrutinizing all acquisitions more carefully these days.''

The case is the second digital mapping deal to garner an in- depth EU review. The commission yesterday extended a review of TomTom NV's acquisition of Navteq competitor Tele Atlas NV for 10 working days until May 21.

``This operation raises some issues similar'' to TomTom and Tele Atlas, the commission said. At issue in the Nokia investigation is ``whether the transaction would increase the costs of navigable digital maps for other companies providing navigation services on mobile handsets or limit their access to these maps, and as a consequence harm consumers,'' it said.

`Common Understanding'

Nokia Chief Financial Officer Rick Simonson said in a statement that, ``We have listened to the commission's concerns, and look forward to finding a common understanding that will enable the transaction to be closed.''

Navteq shares fell 50 cents, or 0.7 percent, to $70.41 as of 12:15 p.m. in New York Stock Exchange composite trading. Nokia has agreed to pay $78 a share in cash for the Chicago-based company. Nokia climbed 25 cents, or 1.3 percent, to 20.10 euros in Helsinki.

The commission, which had a deadline of today to approve the transaction or extend the probe, now has 90 working days for a final decision, Nokia said. The Espoo, Finland-based company said it has received all other required regulatory approvals.

Nokia agreed to buy Navteq, the largest maker of maps used in car-navigation equipment, in October to add maps to its phones and compete with TomTom and Garmin Ltd. Worldwide sales of portable navigation devices will triple to $12.8 billion by 2010 from $4.23 billion in 2006, according to a report by researcher ISuppli Corp. published in September.

Amsterdam-based TomTom agreed in July to buy Tele Atlas, the world's second-largest maker of maps used in car navigation systems, for 2.9 billion euros ($4.6 billion). The EU started an in-depth review of the transaction in November.