Consistent with previous reports of a sale of its HERE mapping unit to a consortium of German automakers, Nokia issued a press release earlier confirming the sale.
The German group includes AUDI AG, BMW Group and Daimler AG. The purchase price, €2.8 billion ($3.07 billion), was slightly higher than the roughly €2.5 billion ($2.7 billion) earlier reported. The transaction is expected to close in Q1 2016.
The HERE sale was motivated by the company’s move to acquire network equipment maker Alcatel-Lucent. Nokia now has two business units: Nokia Networks and Nokia Technologies. The company said the latter “will continue to provide advanced technology development and licensing.”
The $3 billion sale is far less than the $8.1 billion Nokia paid in 2007 for Navteq, which became the basis of HERE. At one time, Nokia envisioned HERE as a global challenger to Google Maps when it was still in the handset business (it will soon be again, but as a licensor of its brand, rather than as an OEM).
According to Nokia, HERE had an operating profit of €28 million ($30 million) for the first half of 2015, roughly 1/100 of the selling price.
As previously discussed, the German automakers were motivated to buy HERE to support their self-driving car initiatives:
HERE is laying the foundations for the next generation of mobility and location based services. For the automotive industry this is the basis for new assistance systems and ultimately fully autonomous driving. Extremely precise digital maps will be used in combination with real-time vehicle data in order to increase road safety and to facilitate innovative new products and services. On the basis of the shared raw data, all automobile manufacturers can offer their customers differentiated and brand-specific services.
The automakers said they would continue to invest in HERE and license its technology and data to third parties. In the press statement, they affirmed that HERE would continue to be a “strong and independent provider of maps and location-based services . . . available to all customers across industries.”
It remains to be seen whether they will continue to invest at levels that maintain HERE’s global mapping competitiveness.