A new agreement will see Nokia sell its digital mapping and location services business, HERE, confirming reports earlier in the year that it would be European car manufacturers who would make the purchase. Nokia this week confirmed the rumours by announcing an agreement to sell HERE to a consortium of leading automotive companies, comprising the German-owned carmakers Audi, BMW and Daimler.
The transaction values HERE at an enterprise value of EUR 2.8 billion (approx. USD 3 billion) with a normalised level of working capital and is expected to close in the first quarter of 2016, subject to customary closing conditions and regulatory approvals.
The purchase aligns with HERE’s work in developing mapping and navigation technologies that will support the emerging autonomous driving industry. HERE have developed a location cloud that harnesses the data generated by vehicles, devices and infrastructure to deliver real-time, predictive and personalised location services. In the automotive industry, where HERE already serves most of the world’s leading automakers, its focus has been on developing precise and accurate mapping as well as supported future services such as driverless technology.
In April 2015, Nokia announced a review of strategic options for HERE in light of its proposed combination with Alcatel-Lucent. The announcement of this sale to the automotive Consortium concludes that strategic review process.
“With this step we complete the latest stage of Nokia’s transformation,” said Rajeev Suri, president and chief executive officer of Nokia. “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.”
HERE generated an operating profit of EUR 28 million for the first half of 2015, and an operating loss of EUR 1,241 million for the full year 2014, with the latter including a EUR 1,209 million charge for the impairment of goodwill. At the end of June 2015, HERE had 6,454 employees. Nokia plans to report HERE as a discontinued operation from the third quarter of 2015 onwards. HERE will continue to operate as a business of Nokia until the closing of the transaction.