A deal for Nokia to sell its maps business to the automaker consortium composed of the BMW Group, Audi and Mercedes-Benz is expected to be finalized sometime next week, according to insiders. It’s believed that the announcement will be made around July 31.
However, the agreement is still not a sure thing as there are still last details like intellectual property rights that may put dents in the agreement with the group. The sources said that Nokia is asking for up to $4 billion for this unit, named HERE. According to a report from Manager Magazin, the automakers could pay around 2.5 billion euros ($2.7 billion) for the business.
It’s quite unusual for the rival automakers to make a joint purchase. They are all going after the top spot in the luxury auto market but with this deal, they can get access to the detailed maps that the future smart vehicles will need. The companies involved in the deal have all not officially commented on this issue.
The automakers initiated talks about a sale. Because they’re the main revenue source of Nokia, they’ve held the upper hand in the race to buy the unit. The maps that HERE supplies are used by around 80% of cars that have in-dash navigation systems in North America and Europe.
Apax Partners and Uber Technologies are two other parties that are interested in acquiring HERE. Google and TomTom are two of HERE’s competition. This sale will mean that Nokia has completely transformed into a company that provides wireless-network equipment.
It got out from the mobile phone industry in 2014. Last April, the company entered a deal to purchase rival network manufacturer Alcatel-Lucent for 15.6 billion euros ($16.9 billion) so that it could be more competitive against Huawei Technologies and Ericsson.
Numerous people have started using digital maps but Nokia’s experience in this business isn’t quite what it expected. In 2008, it created its maps unit by paying $8.1 billion to buy Navteq. It had also bought other location-technology companies. Incidentally, TomTom had made a recent announcement that its high-precision maps will be used by Robert Bosch in automated test vehicles.