Finnish mobile phone giant Nokia announced Tuesday it has agreed to buy U.S.-based digital music distributor Loudeye Corp. for about $60 million.
Under the deal, Nokia will pay $4.50 for each share of Loudeye and Finland-based Nokia aims to provide a music download service under its own brand next year, according to media reports.
"By acquiring Loudeye, Nokia can offer consumers a comprehensive mobile music experience, including devices, applications and the ability to purchase digital music," Nokia said in a statement Tuesday.
Loudeye has long been working with Microsoft (MSFT), whose MSN Music Store in Europe is a Loudeye customer, on enabling simultaneous downloads of music to both mobile phones and PCs. Other customers operating online music stores in more than 20 countries with Loudeye's help are Deutsche Telekom (DT) and Cocal-Cola (KO).
After Loudeye becomes part of Nokia, the handset vendor will be able to put more marketing muscle into the effort. "A company like Nokia brings a tremendous amount of validity to what we are doing," says Mike Brochu, Loudeye's CEO.
Nokia will make an offer to shareholders after agreeing the deal with management. The deal is expected to be completed in the fourth quarter of 2006, it said.