The battle to acquire Nokia's (NYSE:NOK) HERE mapping and location technology unit appears to have settled into a waiting game between the company and a consortium of German automakers as other bidders have faded away, according to a Reuters report.
The report, citing unnamed sources familiar with the matter, said that negotiations between Nokia and the consortium of BMW, Daimler and Volkswagen are now at a delicate stage as the parties hash out the structure and financial terms of a deal, the report said.
Analysts think HERE could ultimately fetch $2.2 billion to $4.4 billion (€2 billion to €4 billion), but now that other bidders like ride-hailing service Uber have apparently dropped out, the car makers are feeling less pressure to pay a higher price.
"Talks have not broken down, but they are at a delicate stage of brinkmanship," an unnamed auto industry source told Reuters.
A Nokia spokeswoman declined to comment, and noted that Nokia is still conducting a strategic review of the business which may or may not result in a sale of HERE. BMW, Daimler, Audi and Uber also declined to comment, the report said.
Because the car makers already use HERE mapping technology in the in-car navigation systems, they do have some additional leverage in the negotiations, Reuters notes, since other buyers would see HERE's value shrink if the car companies stopped using HERE or switched to a rival maps supplier.
Nokia wants to receive a binding offer for HERE, the report said. The equipment maker 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 gear.
The German car makers, a consortium including Uber and Chinese search engine Baidu, and a third group led by Chinese social network and online media company Tencent reportedly made initial offers.
The car makers want HERE to enhance high-definition maps and improve their connected car services--and above all, keep the technology out of the hands of Silicon Valley firms, the report said. The automakers have promised to continue investing in the unit for a number of years and have agreed to contribute live data gathered by sensors on board their vehicles, the report said.
Microsoft (NASDAQ: MSFT) agreed late last month to sell some of its Bing mapping unit to Uber and Uber said it would offer jobs to the roughly 100 Microsoft employees working on image acquisition and map data processing. Uber has since dropped out of the race for HERE, the report said. Meanwhile, NavInfo, which teamed with Tencent group, said in late June said it was not making an offer for HERE.
- see this Reuters article
- see this ZDNet article
- see this Business Insider article
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