Nokia sells HERE to Audi, BMW and Daimler for €2.8 billion
It's finally official. Nokia today announced the sale of its HERE division to German car makers Audi, BMW and Daimler. The mapping and location services business is probably best known for powering products offered by major tech companies like Baidu, Facebook and Microsoft.
Audi, BMW and Daimler have agreed to pay €2.8 billion ($3.07 billion at the time of writing this article) to gain ownership of HERE, with Nokia expecting to receive "slightly above €2.5 billion", after factoring in "certain defined liabilities" coming in at just under €300 million. Not too shabby, but well below the rumored asking price of $4 billion.
Nokia revealed that it was considering the sale of HERE back in mid-April, when it announced the purchase of Alcatel-Lucent for €15.6 billion ($16.6 billion). Since then, multiple companies have lined up to purchase the business, among which Alibaba, Baidu, Facebook and Uber were the most noteworthy bidders.
"With this step we complete the latest stage of Nokia's transformation", says Nokia CEO Rajeev Suri. "We integrated the former Nokia Siemens Networks, divested our Devices & Services business, and have now reached agreement on a transaction for HERE that we believe is the best path forward for our shareholders, as well as the customers and employees of HERE. Going forward, we will focus on our planned combination with Alcatel-Lucent. Once that is complete, Nokia will be a renewed company, with a world-leading network technology and services business, as well as the licensing and innovation engine of Nokia Technologies".
Once Audi, BMW and Daimler take ownership of HERE, the trio will continue to offer the business' services to existing customers. Of course, the immediate reason why they are snapping up HERE is to minimize the licensing costs associated with using maps and location services in the cars they manufacture.
"HERE will be able to offer users a continuously improving product, bringing highly automated driving and location based services a step further. As the volume of anonymized data from the vehicles increases, services will become more convenient, more connected and further tailored to the users’ individual requirements", says the trio.
The purchase of HERE will also allow Audi, BMW and Daimler to more easily customize HERE to fit their future needs, and, perhaps, control which of their rivals gain access to HERE maps and location services. We also have to consider the companies that surround the trio, which are not few.
Audi is part of the Volkswagen group, which also includes Bentley, Bugatti, Ducati, Lamborghini, MAN, Porsche, Scania, SEAT, and Skoda. BMW owns Mini and Rolls Royce, while Daimler includes Bharat-Benz, Freightliner, Fuso, Maybach, Mercedes-Benz, Setra, Smart, Thomas Built, and Western Star. So we are talking about many car brands which will be benefitting from this acquisition.
Audi, BMW and Daimler say that each player will control an equal stake in HERE, with none interested in seeking "to acquire a majority interest". They are adamant that HERE will remain independent.