German car manufacturer Daimler close to £2bn deal for Nokia’s HERE

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BMW, Mercedes and Audi parent Daimler close to agreeing purchase of HERE (formerly Nokia Maps) as part of their connected car strategy

Nokia is close to offloading its mapping business HERE, to German car company Daimler.

According to reports, Nokia is said to have now entered the final stages of negotiations with Daimler, who’s vehicles include BMW, Mercedes and Audi, after receiving an offer in the region of £2 billion.

Daimler has worked with Nokia for its in-vehicle satellite navigation services for a number of years, and is keen to bring the service in-house as part of its connected car strategy. Talks are said have been ongoing for more than three months.

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Here, formerly named Ovi Maps (2007-20011) and then Nokia Maps (2011 – 2012), is Nokia’s multi platform mapping and location services (including voice satellite navigation) brand and covers more than 200 countries globally. It is also used by major firms including Amazon, Microsoft, and Yahoo.

Nokia announced its Q2, 2015 (January-June) interim results yesterday (July 30, see below), showing HERE had seen a 25 per cent year-on-year growth in net sales, with 24 per cent growth in new vehicle licenses for embedded navigation systems. Operating profit for the division was EUR 27 million, a year-on-year to 9.3per cent.

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Speculation

Value of the business was initially estimated to be between £1-2 billion, which would mark a substantial loss to the £5.5 billion it spent on acquiring the operation from Navteq in October 2007. News of the potential sale saw shares at the firm by 4.3 per cent, although as news broke surrounding Daimler, shares dipped by two per cent.

Reports first surfaced about a possible sale back in April that Nokia, who sold its hardware business to Microsoft for £4.6 billion a year ago, will sell off the division to focus on its network and technology (building devices for third parties) operations, which account for more than 90 per cent of its €12.7 billion (2014) revenues.

Nokia confirmed it was undertaking a strategic review of its mapping division in April, following its agreement to buy rival telecoms equipment manufacturer, Alcatel-Lucent. However, Nokia chairman Risto Siilasmaa insisted in May, the review would not “necessarily” lead to selling of HERE.

For full details on the history of Nokia’s involvement in maps and navigation, click here for our in-depth feature.

 

 

 

 

 

 

 

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