Ger­man au­tomak­ers pay US$ 3.1 bil­lion for Nokia’s HERE map­ping busi­ness


A con­sor­tium of Ger­man au­tomak­ers Audi, BMW and Daim­ler an­nounced Mon­day it is buy­ing Nokia Corp.’s HERE map busi­ness in a deal that val­ues the unit at 2.8 bil­lion eu­ros ( US$3.1 bil­lion) and se­cures their ac­cess to tech­nol­ogy that could even­tu­ally be used for driver­less cars.

Nokia, based in Fin­land, has re­fo­cused its busi­ness on pro­duc­ing equip­ment for wire­less net­works af­ter selling its mo­bile phone hand­set op­er­a­tion to Mi­crosoft Corp. The com­pany said it ex­pects to re­ceive slightly over 2.5 bil­lion eu­ros from the sale, with the pur­chasers be­ing com­pen­sated for HERE li­a­bil­i­ties to­tal­ing nearly 300 mil­lion eu­ros.

The three ri­val Ger­man au­tomak­ers said that HERE is “lay­ing the foun­da­tions for the next gen­er­a­tion of mo­bil­ity and lo­ca­tion based ser­vices.” They added that “for the automotive in­dus­try this is the ba­sis for new as­sis­tance sys­tems and ul­ti­mately fully au­ton­o­mous driv­ing.”

The au­tomak­ers said in a joint state­ment that they will each hold an equal stake in HERE and “none of them seeks to ac­quire a ma­jor­ity in­ter­est.” They said that HERE’s man­age­ment will re­main in­de­pen­dent, with the goal of be­ing a plat­form “open to all cus­tomers,” and the con­sor­tium will not in­ter­fere in its op­er­a­tional busi­ness.

“High-pre­ci­sion dig­i­tal maps are a cru­cial com­po­nent of the mo­bil­ity of the fu­ture,” Daim­ler CEO Di­eter Zetsche said. “With the joint ac­qui­si­tion of HERE, we want to se­cure the in­de­pen­dence of this cen­tral ser­vice for all ve­hi­cle man­u­fac­tur­ers, sup­pli­ers and cus­tomers in other in­dus­tries.”

An­a­lysts at IHS Automotive noted that HERE, along with TomTom, is one of two com­pa­nies sup­ply­ing nav­i­ga­ble maps glob­ally as an al­ter­na­tive to Google and Ap­ple. The pur­chase will give the con­sor­tium the ad­van­tage of own­ing its own data.

They said in a re­search note that the pur­chase by a con­sor­tium “may es­tab­lish a de facto stan­dard, giv­ing the in­dus­try a unique op­por­tu­nity to rally around spec­i­fi­ca­tions or pro­cesses that could ... has­ten the on­set of a con­nected and au­to­mated fu­ture mo­bil­ity ecosys­tem.”

Matthias Mach­nig, a Ger­man deputy econ­omy min­is­ter, said the ac­qui­si­tion is of “enor­mous sig­nif­i­cance from an in­dus­trial pol­icy point of view.” He added that it is “im­por­tant that an open plat­form emerges that is open to fur­ther Euro­pean man­u­fac­tur­ers.”

The deal is ex­pected to close in next year’s first quar­ter. Nokia had said in April that it would re­view op­tions for HERE in the wake of its de­ci­sion to pur­chase French tele­com com­pany Al­ca­tel-Lu­cent.

Nokia shares were down 0.8 per­cent at 6.38 eu­ros in Helsinki trad­ing. The three Ger­man au­tomak­ers’ shares were slightly lower in Frank­furt: BMW was off 0.3 per­cent, Daim­ler 0.1 per­cent and Audi par­ent Volk­swa­gen 0.6 per­cent.

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