By Friedrich Geiger 

Germany's biggest auto makers have clinched a deal to buy Nokia Corp's digital mapping business, beating out rival bidders for some of the vital technology for self-driving cars in a EUR2.8 billion ($3.1 billion) acquisition.

The deal is a coup for BMW AG, Audi AG and Daimler AG, the front-runners to buy the business for some weeks, as the auto industry and Silicon Valley technology companies jockey for position to develop and equip the next generation of cars. Nokia Here generated more than half its EUR970 million in 2014 sales from the auto industry, and the rest from location-based services.

Nokia, the Finnish telecom group which sold its mobile handset business to Microsoft Corp. last year, said on Monday it would receive proceeds of around EUR2.5 billion with the buyers taking on EUR300 million in Nokia Here debt. Nokia said it would book a gain of EUR1 billion. Nokia had built the business out of Navteq, a mapping service that it bought in 2008 for $8.1 billion.

Nokia Here, based in Berin, is a main provider of mapping services with data on nearly 200 countries. It provides makers of navigation devices and cars as well as websites and apps with the data.

High-precision digital maps are vital for future self-driving cars because these require an up-to-date plan of a vehicle's surroundings exact to the nearest centimeter.

The German car makers entered the bidding after Nokia announced in April that it was considering a sale after it agreed to buy Alcatel-Lucent and focus on telecom equipment, people familiar with the situation said. BMW, Volkswagen AG's Audi, and Daimler's Mercedes-Benz are the world's leading makers of luxury cars by volume.

The car makers feared that Nokia Here's technology-the most advanced digital map of the world's major road networks-could fall into the hands of Google Inc., Uber Technologies Inc. or Apple Inc. That would put auto makers at risk of losing control of information systems inside the car that are vital to self-driving cars and future automotive safety systems

BMW, Audi and Daimler will each hold an equal stake in Nokia Here.

"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," said BMW, Audi and Daimler in a joint news release.

The buys said that Nokia Here's management would retain its autonomy with the company continuing to serve rival car makers.

Nokia Here earned an operating profit of EUR28 million from revenues EUR552 million in the first half of the year. The unit had 6,454 employees at the end of June.

The car makers said they expect the transaction to be closed in the first quarter of 2016, subject to approval of the relevant antitrust authorities.

Write to Friedrich Geiger at friedrich.geiger@wsj.com

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