Nokia has not indicated whether it will sell its HERE mapping business to a consortium led by German car makers, despite reports earlier this month that a deal was imminent.
The Finnish equipment vendor has yet to respond to a €700 million ($782 million) bid for its mapping business by a consortium led by Audi, BMW and Mercedes-Benz, Reuters reported. The car makers are waiting for Nokia to indicate whether the proposed price is sufficient, or if they need to up their bids.
U.S. private equity company General Atlantic has been lined up as a co-bidder by the German companies, Reuters added. The U.S. company could take a stake of up to 30 per cent in the consortium's share of HERE.
In early May the Wall Street Journal reported that the consortium of car makers is vying for a majority stake in HERE, with Nokia and Chinese web company Baidu set to hold minority shares. The car makers would seek to use HERE as the basis for their own vehicle operating system, which could be used in self-driving cars, the Journal reported.
Such an operating system would enable car makers to fight back against the march of technology companies like Google into the field of connected vehicles.
Baidu was not mentioned in the latter Reuters article and sources told the news agency that the precise shares each company in the consortium would hold in HERE has yet to be decided.
Notably, Nokia CEO Rajeev Suri told European Communications that HERE has attracted "significant interest" but he would not confirm which companies are bidding for the unit. While Suri said the quality of the bids is better than expected, he indicated Nokia is not in a rush to get a deal done and might hold out for higher bids. "Let's give it more time… We may not end up selling it if we don't get the right value."
The auto market has proved lucrative for Nokia's HERE unit, with sales of licences up 29 per cent year-on-year in the first quarter of 2015. The company raised its full-year forecasts for the businesses' operating profit margin to between 9 per cent and 12 per cent on the back of the strong start to the year.
Rumours Nokia was interested in selling HERE began when the company began a strategic review of its businesses after announcing a deal to acquire Alcatel-Lucent. However, the Finnish company has yet to confirm the outcome of the review, or if HERE will be sold.
For more:
- see this Reuters article
- see this European Communications article
- see this separate Reuters article
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Phil Goldstein contributed reporting to this article.