Nokia reaches deal to sell Here business to Audi, BMW Group and Daimler
- 03 August, 2015 16:37
Nokia has reached an agreement to sell its Here mapping and location services business to an automotive industry consortium consisting of Audi, BMW Group and Daimler, in a deal that gives the business an enterprise value of €2.8 billion (US$3.1 billion).
The deal fits with the plans of the automakers to progressively introduce more Internet-based services and automation to assist drivers. Here is developing a location cloud that uses the data generated by vehicles, devices and infrastructure to deliver real-time, predictive and personalized location services, Nokia said in a statement Monday.
The three automotive companies said they will each hold an equal stake in Here, but will take a hands-off approach to the business which will be run independently to serve the entire industry.
The companies said the acquisition aims to ensure the long term availability of Here products and services as an open and independent platform for cloud-based maps and other mobility services that will be accessible to customers from the automotive industry and other sectors.
Here provides mapping and location intelligence for nearly 200 countries in more than 50 languages. With 6,454 employees at the end of June, Here had a non-IFRS operating profit of €46 million on net sales of €552 million for the first half of 2015.
On closure of the deal, expected in the first quarter of 2016, Nokia will stay with two businesses - Nokia Networks focused on broadband infrastructure, software and services, and Nokia Technologies to offer advanced technology development and licensing.
Though the deal values the Here business at €2.8 billion, Nokia will get net proceeds of a little above €2.5 billion for the sale, to compensate the purchasers for certain liabilities of Here to the tune of about €300 million.
Nokia agreed in April to buy Alcatel-Lucent in a deal that values the French telecommunications equipment maker at €15.6 billion. It announced at the time that it would consider a divestment from its Here business. The acquisition of Alcatel-Lucent was approved by the European Commission last month.
The Finnish company, which sold its smartphone business to Microsoft, said recently that it could get back to the mobile phone business, but in the fourth quarter of 2016 at the earliest, in line with its agreement with Microsoft. It would use a brand-licensing model and identify a partner who would do the "heavy lifting" of manufacturing, sales, marketing and customer support, rather than make its own phones. It said last week it had developed the OZO VR camera for virtual reality applications.