The two firms said their coming together would create a "leading global player in the fast growing location based services market". The collaboration is likely to mean more GPS-equipped mobile handsets from Nokia in the near future.
Navteq provides digital map information for car navigation systems, portable navigation devices, web-based mapping applications, and government and business solutions.
It supplies maps to a number of other satnav makers, including Garmin and Magellan - who may well have to pay Nokia to retain use of Navteq's maps. It's the same situation for Mio and Navman who use maps from TeleAtlas, a company that's now owned by rival TomTom.
"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," Olli-Pekka Kallasvuo, president and CEO at Nokia, said in a statement.