THE European Commission has announced an in-depth investigation of Nokia`s planned $8.1 billion takeover of digital mapping company Navteq.The European Union executive arm`s initial study of the deal shows that the "proposed merger raises serious doubts" concerning vertical competition, mainly because of the duopolistic nature of the digital map market and because of Nokia`s strong position in mobile handsets.
Chicago-based Navteq is one of only two major producers of digital maps, the other being Tele Atlas of the Netherlands, itself the subject of a takeover deal.
The European regulatory body has until August 8 to decide on the Nokia-Navteq deal.
It will focus on whether the deal would increase the costs of navigable digital maps for other companies providing similar services, or limit their access to these maps.
Nokia said the commission`s investigation was part of its review process and didn`t signal the ultimate outcome.
"Navteq remains enthusiastic about the pending acquisition by Nokia and the potential benefits to all our customers," Navteq president and chief executive Judson Green said. Separately, the commission extended until May 21 its antitrust investigation of Dutch navigation company TomTom NV`s planned €2.9 billion ($4.99 billion) acquisition of Tele Atlas.
Its initial investigation finds that TomTom`s bid raised serious doubts about the supply of digital maps to portable navigation devices.
TomTom is Tele Atlas`s largest customer, using its maps in car navigation systems.
Analysts said they expected the deal to proceed.
SNS Securities analyst Martijn den Drijver said the extension could indicate the commission was pressing TomTom to address concerns about Tele Atlas`s map database, either by selling it or creating another company for the database.
The Wall Street Journal
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