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 Berlin, is a main provider of mapping
services, with maps for 131 countries as well as other data. It
provides makers of navigation devices and cars as well as websites
and apps with the data.
High-precision digital maps will be vital for self-driving cars
which require up-to-date information 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, having agreed to buy
Alcatel-Lucent and focus on making 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--including
the most advanced digital maps 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.
BMW, Audi and Daimler said they 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 buyers said that Nokia Here's management would retain its
autonomy with the company continuing to serve rival car makers.
Nokia Here made operating profit of EUR28 million from revenue
of EUR552 million in the six months to end-June when it some 6,454
employees.
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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