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Last Updated: Monday, 1 October 2007, 15:11 GMT 16:11 UK
Nokia to buy digital map company
Nokia handsets
Nokia hopes more mapping services will boost sales of its phones
Nokia has agreed to pay $8.1bn (4.0bn) for the US-based digital map supplier Navteq, but there are some concerns that it may be offering too much.

The worries hit Nokia shares, which closed 1.8% lower in Helsinki.

The deal would give Nokia a foothold in satellite navigation, which is one of the fastest growing technology sectors.

Navteq has been cited as a takeover target since July when the leading SatNav company, TomTom, offered $2.6bn for Navteq's main rival, Tele Atlas.

The deal to buy Navteq has been approved by the boards of both companies but still needs to be signed off by regulators and Navteq shareholders.

Nokia already offers satellite navigation services on its N95 and 6110 models.

Navteq provides digital maps of 69 countries for satellite navigation systems as well as mapping websites.

Analysts are concerned that the price could be too high.

"It is very expensive," said Richard Windsor from Nomura.

"The stock is currently about 50 times the forward earnings, which is fairly pricey," he added.

The proposed price is 34% above Navteq's share price a month ago.



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