Nokia sells Here maps to German car makers for €2.8bn
Nokia has finally confirmed the sale of its Here mapping business for €2.8bn ($3bn) to a consortium of Audi, BMW, and Daimler.
The sale ends months of speculation over the fate of Here, with the deal between Nokia and the German car group expected to be complete by the first quarter of 2016. Audi, BMW, and Daimler will hold an equal share in Here, with the three companies saying today that none is seeking a majority interest.
It will be business as usual for customers of Here, at least for now: its new owners will continue to make Here's maps available to all customers from the automotive industry and other sectors, a statement from the car consortium said.
"The management of Here will continue to be independent - with the goal of moving the Here business case forward as a platform, open to all customers. The consortium will not interfere into operational business," the new owners said.
"The acquisition is intended to secure the long term availability of Here's products and services as an open, independent and value creating platform for cloud-based maps and other mobility services accessible to all customers from the automotive industry and other sectors," they added.
Nokia's Here unit earns most of its revenues from licensing maps and real-time traffic product to vehicle manufacturers including Toyota, Ford, Mazda, and Honda, but also counts Yahoo, Microsoft, Samsung, and SAP among its enterprise licensees.
Uber and Baidu were among the companies rumoured to have been in the running to buy Here. However, the German car manufacturers emerged as frontrunners to buy the company in recent weeks.
The car manufacturers are have acquired Here to obtain technology that will help them develop new assistance systems and fully autonomous driving - the company likely appealed as it allows the consortium to do so without being locked into services from the likes of Apple or Google.
Underpinning such systems will be precise digital maps, mobility and location-based service capabilities, as well as the high-precision cameras and sensors installed on modern cars that help provide real time-time traffic data. The idea is that automakers' access to shared raw data will allow them to create "differentiated and brand-specific" services for their customers.
"Here will be able to offer users a continuously improving product, bringing highly automated driving and location based services a step further. As the volume of anonymized data from the vehicles increases, services will become more convenient, more connected and further tailored to the users' individual requirements," said Audi board member Ulrich Hackenberg, BMW board member Klaus Fröhlich, and Daimler board member Thomas Weber.
The sale marks the next phase of Nokia's transformation from one of the world's largest device manufacturers to a predominantly network equipment business, which will be bolstered by its proposed €15.6bn acquisition of Alcatel-Lucent.
Nokia it said it expects to receive proceeds of about €2.5bn from the sale of Here, with the buyers taking on €300m in certain liabilities.
The sale will leave Nokia with just two units: its networking business, which is expected to merge with Alcatel-Lucent in the first half of 2016; and Nokia Technologies, its intellectual property unit responsible for the new Ozo VR camera and N1 tablet.
"Going forward, we will focus on our planned combination with Alcatel-Lucent. Once that is complete, Nokia will be a renewed company, with a world-leading network technology and services business, as well as the licensing and innovation engine of Nokia Technologies," said Rajeev Suri, president and CEO of Nokia.
Without devices, Here was Nokia's second largest unit behind the main network equipment business. The mapping unit had a headcount in June of just under 6,500 and last quarter earned revenues of €290m.
Nokia's Here brand emerged out of its acquisition of Navteq for $8.1bn in 2008. The company did attempt to build Here into a consumer business, but abandoned that last year to refocus on automotive.
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