Nokia may sell HERE

By on 14 April, 2015

Espoo

Nokia is considering selling its maps business, HERE, as the Finnish company focuses on boosting growth at its wireless-network unit and improving its debt rating, Bloomberg has reported.

According to Bloomberg, Nokia has reached out to potential buyers including Uber Technologies Inc., the mobile car-booking application currently disrupting the taxi industry, as well as private-equity firms. A group of German carmakers has also shown interest, Bloomberg reported, and bids for the unit are expected as soon as this month.

HERE is valued at about 2 billion euros, according to Nokia’s financial reports, which suggests that Nokia’s mapping assets have lost value since 2008, when the company spent US$8.1 billion to buy map provider Navteq Corp.

Nokia Chief Executive Officer Rajeev Suri is seeking to reduce the company’s debt and boost its rating from junk status. The company’s map business provides data to Amazon.com Inc., Microsoft Corp., Yahoo! Inc. and four out of five car-navigation systems.

Last year, Nokia named Sean Fernback to head the maps business. Fernback, who joined Nokia from Dutch navigation-device maker TomTom NV, replaced Michael Halbherr, who, according to Bloomberg, left the company after disagreeing over the unit’s strategy with CEO Suri. There was internal debate over whether the unit should focus on automotive and enterprise clients or also continue to target consumers, the people said.

Bloomberg also reported that Sebastien Sztabowicz, an analyst at Kepler Cheuvreux in Paris, has speculated that proceeds from a sale of HERE could be used for acquisitions to build Nokia’s network business, including the long-mooted takeover of part of French rival Alcatel-Lucent SA.

“We believe a sale of the mapping business could give further credibility to the scenario of an offer on Alcatel-Lucent’s wireless access business,” Sztabowicz wrote in a note to clients.

Nokia, which is working with a financial adviser, may yet decide against a sale if it can’t get a price that it deems sufficient, Bloomberg reported.

Nokia has three businesses left after it sold its phone-unit to Microsoft for about $7.5 billion: the networks division, which makes up about 90 percent of total revenue, its maps business, and a research and development unit which is responsible for licensing its patents.

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