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Nokia Oyj is exploring the sale of its maps business as the Finnish equipment maker focuses on boosting growth at its wireless-network unit and improving its debt rating, according to people familiar with the matter.
Nokia’s maps business, which is known as HERE and competes with rivals such as Google Inc., is attracting interest from companies and private-equity firms, the people said, asking not to be identified because deliberations are private. Bids for the unit, which Nokia valued in its financial report at about 2 billion euros ($2.1 billion), are expected soon, they said.
The Finnish company, which is working with a financial adviser, may decide against a sale if it can’t get a price it deems sufficient, the people said. HERE reported full-year sales of 970 million euros and an operating loss of 1.24 billion euros, including a goodwill impairment of 1.21 billion euros, according to the annual report. In January, Nokia projected rising sales for its maps and patents divisions for 2015.
Chief Executive Officer Rajeev Suri is seeking to reduce the company’s debt and boost its rating from junk status. Nokia’s digital-map business provides data to Amazon.com Inc., Microsoft Corp., Yahoo! Inc. and four out of five car-navigation systems.
A representative for Espoo, Finland-based Nokia declined to comment.
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 left the company after disagreeing over the unit’s strategy with CEO Suri, people familiar with the matter said at the time. There was internal debate over whether the unit should focus on automotive and enterprise clients or also continue to target consumers, the people said.
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. In January the company reported fourth-quarter net income of 443 million euros, and sales that rose 9.4 percent to 3.8 billion euros.
–With assistance from Marie Mawad and Francois de Beaupuy in Paris.
This article was written by Manuel Baigorri, Naomi Kresge and Adam Ewing from Bloomberg and was legally licensed through the NewsCred publisher network.