Report: Nokia reaches $2.7B deal to sell HERE unit to German automakers

Nokia (NYSE:NOK) has reached a deal to sell its HERE mapping and location technology unit to a group of German automakers for a little more than $2.71 billion (€2.5 billion), according to a Wall Street Journal report. 

Earlier, Bloomberg reported that a deal was at hand. Other recent reports, including one from Reuters, had indicated that the car companies were the last remaining bidder for the unit and that the two sides were engaged in tense talks over price and the deal structure.

The car companies intend to purchase all of the HERE unit and then invite other global auto makers to take stakes in the company, the WSJ reported, citing an unnamed source. "The goal has always been to run the service as an open platform for everyone," the Journal's source said. "The final signing could take place in the next few days."

The Bloomberg report, which cited unnamed sources familiar with the matter, said the car companies--BMW, Mercedes-Benz parent Daimler AG and Audi--were still ironing out final details with Nokia, including intellectual property rights, and that no formal agreement had yet been struck. Nokia reportedly had sought as much as $4 billion for the HERE division.

Representatives for the carmakers and a Nokia spokesman declined to comment, according to Bloomberg

Nokia has been reviewing its options for the unit since mid-April, when it announced plans to purchase rival Alcatel-Lucent (NYSE: ALU), as part of an effort narrow its focus to network equipment.  

The Bloomberg report noted that the car makers are likely willing to strike a deal with Nokia to keep driver data out of the hands of Google (NASDAQ: GOOG), a leader in mapping as well as search (and a company that has been testing self-driving vehicles). Yet because the car companies are also major HERE customers, they likely have leverage in the negotiations. HERE supplies mapping data to around 80 percent of cars with dashboard navigation systems in North America and Europe, according to Bloomberg. HERE also provided mapping data for a 32-acre site in Michigan designed to test autonomous vehicles.  

The German car makers, a consortium including ride-hailing service Uber and Chinese search engine Baidu, and a third group led by Chinese social network and online media company Tencent reportedly made initial offers for HERE, but every party except the automakers dropped out.

For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article

Related articles:
Report: Nokia in tense talks with German automakers over HERE unit
Nokia's HERE unit reportedly drawing bids from German automakers, Baidu, Uber and maybe even Facebook
Nokia chiefs prefer German auto makers as HERE buyers
Nokia stays tight-lipped on German auto makers' HERE bid
Nokia tipped to secure HERE deal within a fortnight
Nokia navigating 4 offers for its HERE mapping business

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