"Location based services are one of the cornerstones of Nokia's Internet services strategy. The acquisition of Navteq is another step toward Nokia becoming a leading player in this space," said Olli-Pekka Kallasvuo, Nokia president and CEO.

Navteq's chairman Christopher Galvin said, "Nokia's offer of $78 per share reflects a very attractive valuation of Navteq's stockholders, representing a 34 percent premium to our stock price of one month ago."

He said that Navteq had approached other potential purchasers. "Our board took those contacts and discussions into account in determining that Nokia's proposal was the best opportunity available to maximise value for our stockholders."

Navteq's current map data business will continue to be operationally independent but would become a Nokia Group company. Nokia said Navteq would continue to serve its map customers as before the purchase.

The acquisition is expected to close in the first quarter of 2008.