Nokia has announced that it has agreed to sell its HERE mapping business to a consortium of automobile makers for €2.8 billion ($3.07 billion), ending months of speculation over its future.
The Finnish company confirmed that it will hand the business over to AUDI AG, BMW Group and Daimler AG (Mercedes) in a deal that is expected to close in the first quarter of next year. The future of HERE has been up in the air since Nokia completed the sale of its devices business to Microsoft last year. In April of this year, Nokia confirmed it was “reviewing” options for HERE, one outcome of which was a sale.
It isn’t initially clear whether any, or indeed how many, of HERE’s 6,454 staff will be let go following the closure of the deal. That sizable headcount is thought to be one reason why Nokia was keen to offload HERE, which pulls in around one-tenth of the revenue that Nokia Networks accounts for, according to the latest financials.
HERE was speculated to have attracted significant interest from a variety of different companies across the world. Aside from the car firms, a joint bid from Uber and (its investor) Baidu was highly speculated, while China’s Navinfo, and even the likes of Amazon, Alibaba, Facebook and Apple were rumored to have expressed interest.
As TechCrunch’s Ingrid Lunden explained when assessing the bidders last month, the business’s location technology patents, databases and location attributes (which a former senior HERE employee pegged at 300), made it “one of the biggest and more valuable mapping assets to come to the market in years.”
Nokia is expected to complete its $16.6 billion deal to buy Alcatel-Lucent by the first half of next year. These deals will leave the firm with Nokia Networks, its broadband infrastructure business, and Nokia Technologies, an “advanced technology and development” unit that intends to work with manufacturers to release new mobile devices in 2016.
In an internal interview, President Sean Fernback said HERE would become “a much stronger company” that will remain independent and neutral — “the Switzerland of maps” — following the acquisition.