Nokia is less than two weeks away from agreeing the sale of its HERE mapping business to a consortium of German car manufacturers and Chinese web company Baidu.
Negotiations between the Finnish company and a consortium comprising BMW, Audi and Mercedes-Benz are at an advanced stage, with a purchase price well in excess of €2 billion ($2.2 billion) being discussed. If approved, the car makers would hold a majority stake in HERE, with Baidu and Nokia taking minority shares, sources told the Wall Street Journal.
The auto makers are keen to secure access to HERE's maps as part of attempts to build an operating system for self-driving cars and to prevent technology companies including Google from stealing a march in the field of connected cars, the Journal explained.
Car manufacturers are an important sales channel for Nokia's mapping unit. Sales of licences for embedded navigation systems in new vehicles increased 29 per cent year-on-year in the opening quarter of 2015, and Nokia raised its guidance for the unit's full-year operating profit margin to between 9 per cent and 12 per cent, from between 7 per cent and 12 per cent previously.
Nokia sparked rumours it was seeking a buyer for HERE when it announced it was conducting a strategic review of the business as part of a wider deal to merge its Networks unit with Alcatel-Lucent.
German trade publication Manager Magazin last month reported Nokia was negotiating with four potential bidders. In addition to the consortium of German car makers, the magazine named Uber, Facebook and U.S. private equity company Hellman & Friedman as interested parties.
The report also revealed Nokia was seeking €2 billion for the mapping business.
However, Reuters yesterday reported that Nokia chairman Risto Siilasmaa cast doubt on whether the company would sell HERE, noting that a sale is just one potential outcome of the strategic review.
Siilasmaa told shareholders at Nokia's AGM that the company is still considering options to continue running HERE as a Nokia business and that a sale of the business is not guaranteed, Reuters reported.
For more:
- see this Wall Street Journal report
- view Nokia's Q115 earnings statement
- see this Reuters article
Related Articles:
Nokia navigating 4 offers for its HERE mapping business
Nokia not planning smartphone return
Ericsson comes under spotlight after Nokia-AlcaLu unveil plans to merge
Nokia plans to buy Alcatel-Lucent in €15.6B deal
Nokia and Alcatel-Lucent: the French connection