Nokia has agreed to sell its digital mapping and location services business, HERE , to a consortium of leading automotive companies, comprising AUDI AG, BMW Group and Daimler AG (the “Consortium”).
Subject to customary closing conditions and regulatory approvals, the deal is expected to be closed in the first quarter of 2016.
Berlin based HERE is a subsidiary of Nokia, established as its own brand at the end of 2012.
The transaction, values HERE at an enterprise value of EUR 2.8 billion (approximately US$3 billion). After compensating defined liabilities of HERE, which is currently expected to be EUR 300 million, Nokia will receive net proceeds of slightly above EUR 2.5 billion.
HERE is developing a location cloud that harnesses the power of data generated by vehicles, devices and infrastructure to deliver real-time, predictive and personalized location services. HERE provides mapping, navigation and location intelligence.
As per Nokia, HERE has generated operating profit of EUR 28 million on net sales of EUR 552 million for the first half of 2015 with 6 454 employees as on June 2015.
Until closing of the acquisition, HERE will continue to operate as a business of Nokia. From the third quarter of 2015, Nokia plans to report HERE as a discontinued operation.
In the first half of 2016, proposed combination of Nokia with Alcatel-Lucent is expected to be closed. The company is planning to create an innovation leader in next generation technology and services for an IP connected world post.
Customers of HERE includes Amazon, Audi, BMW, Baidu, Bosch, Continental, Daimler, Esri, FedEx, Garmin, General Motors, Honda, Microsoft, Opel, Oracle, Porsche, Samsung, SAP, Toyota, UPS, Volkswagen, Volvo, Yahoo.
Rajeev Suri, President and Chief Executive Officer of Nokia, said: “With this step we complete the latest stage of Nokia’s transformation. We integrated the former Nokia Siemens Networks, divested our Devices & Services business, and have now reached agreement on a transaction for HERE that we believe is the best path forward for our shareholders, as well as the customers and employees of HERE. Going forward, we will focus on our planned combination with Alcatel-Lucent. Once that is complete, Nokia will be a renewed company, with a world-leading network technology and services business, as well as the licensing and innovation engine of Nokia Technologies.”