Deal to be completed by Q4.
Finnish mobile technology giant Nokia has struck a deal to buy digital music technology vendor Loudeye Corp for about $60 million. Under the terms of the pact, unveiled today (Aug. 8), Loudeye shareholders will receive $4.50 per share in cash for each share of common stock.
The transaction is expected to be completed in the fourth quarter of 2006.
In a statement, Nokia says it plans to use the Loudeye platform to offer mobile users a complete package of digital music devices, applications and services.
"Now with Loudeye, we can offer the whole end-to-end solution, which allows us to focus on ease of use," comments a Nokia spokesman. "That's how we see us complementing each other. If this deal goes through, this is the type of scenario we'd like to build."
Michael Brochu, president and CEO of Loudeye, adds, "Our combined teams will deliver a comprehensive mobile music experience to Nokia device owners all over the world."
Seattle-based Loudeye, which in 2004 bought U.K.-based digital music service provider OD2 in a deal worth about $38 million, powers 60 services in more than 20 markets across Europe, South Africa and Australasia.
The firm aggregates rights and content of more than 1.6 million tracks licensed from all the major labels and hundreds of independent labels.
Executives at both firms say it's too early to say how job cuts might take shape. "We are very complementary companies. There's very little overlap at all," Ed Averdieck, managing director for Loudeye Europe, tells Billboard.biz. "It's the OD2 business that's the go-forward operating entity."
Loudeye, which had been seeking a buyer since February, sold its U.S. operations in May to digital entertainment firm Muze for $11 million in cash.
Nokia boasts more than 15 million sales of its music-enabled devices in the second quarter, making it one of the leading players in its field. The company claims to be the world's biggest manufacturer of mobile telephones.