Nokia invites buyers for high definition navigation business Here
11 Jul 2015
Businesses betting on a future full of self-driving cars and delivery drones would need a mapping service capable of navigating in three dimensions, and most would love an alternative like Nokia's Here, especially if they competed with Google in other arenas.
Nokia invited buyers for its Here high-definition mapping / navigation business in April, targeting $4 billion, about half what it paid for the service, then called Navteq, in 2008 (See: Nokia's Navteq buys Reach Unlimited for Trapster app).
Bidders had included a group of German automakers led by Volkswagen's Audi, according to three people familiar with the matter. Uber and Chinese giants Baidu and Tencent were also among the interested parties.
"The buzz is a good indication that what we thought was really valuable is really valuable," Bloomberg quoted John Ristevski, Here's head of 3D image processing. Ristevski declined to comment on the bidders, who had not discussed their offers publicly.
The revenue of the Here division in 2015 was about $1.1 billion. Microsoft, Yahoo, FedEx, and Amazon.com paid Nokia for access to its 27 million miles' worth of maps.
Nokia said eighty per cent of cars in the US and Europe with built-in navigation systems had Here providing turn-by-turn instructions.
Meanwhile, Reuters reported that the proposed sale of Here to a consortium of German automakers consisting of BMW, Daimler and Volkswagen (owner of Audi) and private equity firm General Atlantic had reached a standstill.
Although negotiation was still on about the deal, severe disagreement had risen regarding the price and structure of the deal.
Initially bids had been received from three consortiums had placed bids for the HERE unit. Besides the consortium of German automakers, US-based taxi operator Uber and China's Baidu had formed a consortium to bid for Here.
The third consortium was formed by Chinese media, mobile and Internet services provider Tencent, Chinese map developer NavInfo and Swedish buyout firm EQT Partners AB.
The Uber-Baidu consortium and the consortium of Chinese media, mobile and internet services providers had, however, exited the bidding process.
This placed the German automaker-backed consortium at a much stronger position to bargain with Nokia for Here.