Nokia Oyj is nearing an agreement to sell its maps business to a group of German luxury-car makers including BMW AG, according to people familiar with the matter.
An agreement could be reached as early as next week, with an announcement targeted for around July 31, said the people, who asked not to be named because the negotiations are private. Talks could still fall apart as the consortium of BMW, Mercedes-Benz parent Daimler AG and Audi AG hammers out final details such as intellectual property rights, the people said. The carmakers may pay Nokia about 2.5 billion euros ($2.7 billion) for the unit, called HERE, Manager Magazin reported.
Representatives for the carmakers and a spokesman for Espoo, Finland-based Nokia declined to comment. Nokia has sought as much as $4 billion for HERE, people familiar with the matter have said.
BMW, Audi and Mercedes are typically fierce competitors as they vie with one another for the global lead in luxury-car sales. While they do cooperate from time to time, teaming up on an acquisition of this scale would be unprecedented. With Google Inc. testing its own self-driving cars, the bid for HERE shows the importance of securing access to the detailed maps that smart vehicles of the future will require.
Nokia’s shares fell as much as 2 percent, reversing earlier gains, and were down 1 percent at 4:42 p.m. in Helsinki.
Mapping competitor TomTom NV of the Netherlands fell 6.7 percent in Amsterdam. Harold Goddijn, chief executive officer of TomTom, earlier in the day declined to comment on Nokia’s negotiations and whether his company was also talking to any potential takeover candidates.
The carmakers, which are keen to protect driver data from Google, first approached Nokia about a sale. As a key source of HERE’s revenue, they’ve had the upper hand in the competition to acquire the business. HERE supplies maps data to about 80 percent of cars with in-dash navigation systems in North America and Europe.
Other companies interested in HERE have included Apax Partners and Uber Technologies Inc., people familiar with the matter have said.
The sale would complete Nokia’s transformation into a provider of wireless-network equipment, after its exit from mobile phones in 2014. The company agreed to buy rival network maker Alcatel-Lucent SA for 15.6 billion euros in April to better compete with Huawei Technologies Co. and Ericsson AB.
While digital maps have gained users, Nokia’s foray into the business didn’t live up to expectations. The company built its maps unit by buying Navteq Corp. for $8.1 billion in 2008, and also acquired other location-technology companies.
HERE provided mapping data for a 32-acre (13-hectare) simulated city being used to test self-driving cars in Michigan. TomTom today said that German auto-parts supplier Robert Bosch GmbH is using its high-precision maps in automated test vehicles.
Read this next:
- Nokia Joins Partners to Work on App for Paying Transit Fares
- Curtain Falls on Nokia’s Finnish Home in Boom-to-Bust Demise
- Ericsson Shares Gain the Most in Year as Sales Exceed Estimates