First Free Story (1 of 3)Join Skift Pro
BMW AG, Audi AG and Daimler AG will buy Nokia Oyj’s digital-map unit for 2.8 billion euros ($3.1 billion), beating online-industry rivals such as Baidu Inc. for control of one of the biggest vehicle-navigation suppliers.
The world’s three largest makers of luxury cars will each acquire an equal share of Nokia’s HERE division, and the transaction is expected to be completed in the first quarter of next year, the carmakers said in an e-mailed statement today. Nokia said it will get net proceeds on the sale of slightly more than 2.5 billion euros.
While there has previously been limited cooperation on auto parts, a joint acquisition on this scale involving BMW, Volkswagen AG’s Audi division and Mercedes-Benz owner Daimler would be unprecedented. The deal underscores the German competitors’ push for self-driving systems independent of technology giants such as Google Inc., which is looking at entering the auto industry.
Nokia is selling HERE, which supplies map data for about 80 percent of cars with in-dash navigation systems in North America and Europe, to focus on making mobile-phone network equipment. The price compares with the $8.1 billion that Espoo, Finland- based Nokia paid in 2008 for map provider Navteq Corp., one of the businesses that it combined to create HERE.
Supplying HERE’s technology to other carmakers would also enable the German partners to tap into a market for automotive data and connectivity that consulting company McKinsey & Co. estimates could surge sixfold from current levels to 180 billion euros by 2020.
In addition to Baidu, earlier suitors for HERE included London-based private-equity firm Apax Partners in cooperation with U.S. online car-booking provider Uber Technologies Inc.; a group comprising China’s Tencent Holdings Ltd., NavInfo Co. and Swedish buyout firm EQT Partners AB; U.S. private-equity firms Hellman & Friedman, Silver Lake Management and Thoma Bravo; and Microsoft Corp., according to people familiar with the matter.
Nokia agreed in April to buy French competitor Alcatel- Lucent SA to create the world’s largest supplier of mobile- network equipment. That deal received U.S. antitrust clearance in mid-June.
This article was written by Christoph Rauwald from Bloomberg and was legally licensed through the NewsCred publisher network.