Nokia has finally confirmed the sale of its mapping service named ‘Here.’ As per the reports, HERE has been sold for a whopping €2.8 billion or $3 billion to German Car Makers (BMW, Audi, and Daimler).
The latest development has ended an array of speculations that kept hitting the market from time to time. Even though all three of these companies have bought the ‘Here’ mapping service of Nokia, none of them holds a majority stake. The confirmation from all three companies came stating that they will have an equal stake and the transaction is likely to be completed by 1Q2016.
Road Ahead
The deal doesn’t make any change in the existing management of ‘Here’ mapping. According to a report, its management team will continue to work independently to improve the services in future. The major part of Here’s revenue comes from its real-time traffic product to companies like Ford Motor Company (NYSE:F), Toyota Motor Corp (ADR)(NYSE:TM), Honda Motor Co Ltd (ADR)(NYSE:HMC), and Mazda.
Apart from this, it also earns revenues through licensing business that includes clients like Microsoft Corporation (NASDAQ:MSFT), Yahoo! Inc. (NASDAQ:YHOO), SAP SE (ADR)(NYSE:SAP), and Samsung.
Baidu Inc (ADR) (NASDAQ:BIDU) and Uber showed interest in buying Here initially, but the three automakers ended all speculations by offering the largest bid price to Nokia. After paying off €300 million worth of liabilities, Nokia is expected to make a net gain of close to €1 billion. Earlier, Nokia decided to sell off its mapping service so that it could focus on wireless network unit business and achieve a higher growth rate over the next couple of years.
Rajeev Suri, Chief Operating Officer, Nokia, cited in a statement that it’s the biggest step that the company has taken towards its complete transformation. From now onwards, Nokia will focus on Alcatel-Lucent deal to achieve the end objective of becoming a global leader in the technology field.
Once this deal gets over, Nokia will be left with two businesses — Nokia Technologies and Nokia Networks.
Sources: zdnet, ibtimes.co.uk
