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Nokia said to prefer German carmakers as buyer for maps unit
[LONDON] Nokia Oyj, the Finnish maker of telecommunications equipment, is leaning toward selling its maps business to a group of German carmakers, although price differences remain, according to people familiar with the matter.
Nokia is aiming to pressure the group, which consists of Audi AG, BMW AG and Daimler AG, to increase its offer by continuing to entertain bids from others, said the people, who asked not to be identified because the talks are private. The carmakers, who are key clients for the technology and first approached Nokia about a sale, may hesitate to pay the as much as US$4 billion being sought for the unit, known as HERE, they said.
Final bids are due this week, no decision has been made and Nokia could opt for a different bidder for the business, which supplies maps data for about 80 per cent of cars with in-dash navigation systems in North America and Europe. Several private- equity bidders, including Apax Partners, have dropped out of the race because they believe the carmakers are the preferred bidder, the people said.
Baidu Inc, which previously teamed up with Apax and Uber Technologies Inc, people familiar with the matter said last month, may now join the carmakers, which could help them expand the mapping business in China, one of the people said. Baidu is China's largest search engine.
Nokia shares fell 1.4 per cent to 6.24 euros at 11:12 am in Helsinki.
Equipment Focus Nokia is seeking to sell the mapping unit as it focuses on mobile-network equipment. It agreed to buy Alcatel-Lucent SA in April to create the world's largest supplier of the gear. The company may still decide not to sell HERE, CEO Rajeev Suri told France's National Assembly this week.
The potential valuation of as much as US$4 billion suggests Nokia's mapping assets have lost much of their value since 2008, when the company spent US$8.1 billion to buy map provider Navteq Corp.
Other companies that were interested in the business included a group comprising China's Tencent Holdings Ltd., NavInfo Co and Swedish buyout firm EQT Partners AB, as well as three US private-equity firms: Hellman & Friedman, Silver Lake Management and Thoma Bravo, people familiar with the matter said previously. Microsoft Corp has also considered buying a minority stake, they said.
A spokeswoman for Nokia, which is based in Espoo, Finland, declined to comment. Representatives for Audi, Daimler, BMW, Apax and Baidu declined to comment.