Nokia HERE Mapping Service Sold for $3.07 Billion to German Auto Consortium

Nokia is reported that the company has sold HERE mapping service for a figure of $3.07 billion USD to German auto consortium which consists of Audi AG, BMW Group as well as Daimler AG. The deal is expected to finalize in the first quarter of 2016 with profit of about $2.75 Billion.

One of the reasons that can be concluded on why the automakers are willing to purchase the service as such a huge amount is that they are expected to use the data generated from it for the cars that they are developing so that the cars can navigate themselves based on the data. The mapping service also expected to be available across multiple platforms.

With the deal went through successfully, Nokia is expected to concentrate on the bought over of Alcatel-Lucent which after this is finalized, it will make Nokia a world leading network technology and services business as well as licensing and innovation of Nokia Technologies as mentioned by Rajeev Suri, President and Chief Executive Officer of Nokia.

HERE is reported to receive about $606 million USD and had an operating profit of $30.7 million USD during the first half of 2015. This is definitely is a good news as the service suffered a loss in 2014. According to the last year’s report, the service received about $1.07 billion USD and written off certain things out of goodwill which cost about $1.33 billion USD and thus the company made an operating loss of $1.36 billion.

Moving forward, Nokia is expected to design and license smartphones in 2016 as per the agreement with Microsoft.

Nokia HERE Mapping Service Sold for $3.07 Billion to German Auto Consortium

Nokia is leaning to German Carmarkers to Buy for Their Maps Unit

Nokia is looking for companies to buy their HERE mapping unit. It is reported that the price tag for selling the unit is for $4 billion with final bid due this week. It seems like the Finnish company is leaning towards to a group of German car manufacturers such as Audi, Daimler, BMW as the buyers. However, nothing can be confirmed as of now. Nokia even could be selling the unit for different bidder.

There are a lot of companies which are interested in buying the unit. One of them is Baidu Inc which previously had teamed up with Apax and Uber Technologies Inc. Baidu Inc is the largest search engine in China and the company may need the mapping technology in case if they want to expand their business in China. Other companies include Tencent Holdings Ltd (China), NavInfo Co. and EQT Partners AB (Swedish) as well as Hellman & Friedman, Silver Lake Management and Thoma Bravo. The last three companies are U.S private equity firms. It seems like even Microsoft and Apple is also interested in buying the mapping unit.

There is no official announcement from Nokia regarding this matter. Nokia shares fell 1.4 percent to 6.24 euros at 11:12 a.m. in Helsinki.

Nokia is leaning to German Carmarkers to Buy for Their Maps Unit

Nokia planning to sell off its Maps business to focus on its Network business

Nokia is exploring the possibility of selling off its HERE maps business as it wants to focus on its wireless network business according to sources. The move would help the Finnish company to improve its debt rating. Readers may recall that Nokia had sold its mobile phone business to Microsoft in April last year.

Bloomberg reports that Nokia has already approached a few prospective buyers such as Uber Technologies that operates mobile app-based transportation, and other private companies. Sources say that German automakers such as Daimler, BMW and Volkswagen also seem interested in buying the app and the bidding may even begin this month.

Nokia’s HERE Maps business is currently valued at around €2 billion ($2.1 billion) which is much lower than the $8.1 billion the company paid to acquire it from US-based Navteq Corp. in 2008. It is said that if Nokia doesn’t get adequate price for its maps business, the company may not go ahead with the sale.

HERE Maps come pre-installed in the Microsoft Lumia phones that run Windows Phone OS. HERE Maps app for Android phones was released last year and it has already been downloaded by over 2.5 million users till date. Now the HERE Maps app is also downloadable in iOS since March this year. Besides Microsoft, Nokia’s maps division also provides data to other big companies such as Amazon, Yahoo and “four out of five car-navigation systems”.

According to the annual report, HERE Maps achieved full year sales of €970 million with an operating loss of €1.24 billion. The company expects the sales to grow further in 2015. Besides Maps and Networks, Nokia also has an R & D unit that looks after the patents licensing business.

Nokia planning to sell off its Maps business to focus on its Network business