Nokia (NYSE:NOK) is considering selling its HERE mapping unit to focus more on wireless network gear, according to multiple reports.
The reports from Bloomberg and Reuters, which cited unnamed sources, said that Nokia has hired a financial adviser to help it with the possible deal. According to Bloomberg, Nokia has already reached out to potential buyers, including car-booking service Uber and private equity firms. Further, Bloomberg reported, a group of German car makers has also expressed interest. Bids for Nokia's HERE unit are expected as soon as this month.
Nokia declined to comment, according to the reports.
Nokia said that HERE is valued at about $2.1 billion (€2 billion), according to Nokia's latest financial report. As Bloomberg notes, that suggests Nokia's mapping assets have lost value since 2008, when the company bought mapping provider Navteq for $8.1 billion. Of course, since then, mapping software has become common on smartphones, with Google (NASDAQ: GOOG) Maps leading the market, though Apple (NASDAQ: AAPL) provides its own mapping software.
Still, HERE provides mapping data to heavy hitters including Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), Yahoo and four out of five car-navigation systems. Some of those companies could be potential buyers, as could Apple, Re/code noted.
In 2014, HERE reported full-year sales of around $1.02 billion (€970 million) and an operating loss of $1.32 billion, including a goodwill impairment of $1.28 billion, according to Nokia's annual report. Nokia said in January that it expects sales to rise for the mapping unit in 2015.
However, Nokia's sales are dominated by its network unit.
Some analysts speculate that a transaction involving the HERE unit could give Nokia enough financial firepower to make a bid for Alcatel-Lucent's (NYSE: ALU) wireless business.
"We believe a sale of the mapping business could give further credibility to the scenario of an offer on Alcatel-Lucent's wireless access business," Kepler Cheuvreux analyst Sebastien Sztabowicz wrote in a research note, according to Bloomberg.
"We have estimated that HERE's value is around 3.3-4.8 billion euros [$3.5-$5 billion], and in a possible deal the price should be more than that," Inderes Equity Research said on its Twitter account.
In December Nokia brought HERE to the Android platform (instead of just to Samsung phones) and in March Nokia brought the platform to Apple's iOS.
For more:
- see this Bloomberg article
- see this Reuters article
- see this Re/code article
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