An automobile dashboard monitor with HERE software, the connected driving maps unit of Nokia. HERE’s map is accurate to within as few as 10cm(4 inches), a level of detail that’s necessary as cars become increasingly able to guide themselves.

Bloomberg/Munich


BMW, Audi and Daimler will buy Nokia’s digital-map unit for €2.8bn ($3.1bn) to gain technology for connected cars that will eventually be the basis for self-driving vehicles.
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, they said yesterday. Nokia said its net proceeds on the sale will total slightly more than €2.5bn.
While there has previously been limited cooperation on auto parts, a joint acquisition on this scale involving BMW, Volkswagen’s Audi division and Mercedes-Benz owner Daimler is unprecedented. The deal underscores the German competitors’ push for self-driving systems independent of technology giants such as Google.
“This purchase shows carmakers are expecting huge new growth in autonomous driving and connectivity,” said Frank Biller, a Stuttgart, Germany-based analyst for LBBW. “They’ve all been cooperating with HERE for maps for a long time, so they know about the quality of the service.”
Supplying HERE’s technology to other carmakers would enable the German partners to tap into a market for automotive data and connectivity that consulting company McKinsey & Co estimates could surge six-fold from current levels to €180bn by 2020.
HERE’s map is accurate to within as few as 10 centimetres (4 inches), a level of detail that’s necessary as cars become increasingly able to guide themselves. The division has said it’s working with 10 car makers on automated driving. Its in-car map software already links to a smartphone app and can learn drivers’ habits, such as picking up a coffee en route to work.
Licensing fees for its maps are HERE’s main source of revenue. The business generated an operating profit of €28mn in the first half of this year, Espoo, Finland-based Nokia said. The unit reported a loss of €1.24bn last year, including a goodwill impairment charge of €1.21bn.
Nokia is selling HERE to focus on making mobile-phone network equipment. The sale price compares with the $8.1bn that Nokia paid in 2008 for map provider Navteq Corp, one of the businesses that it combined to create HERE.
The car makers said HERE’s management will be independent and that the company will continue to make its maps available to all customers across industries. The unit has about 6,500 employees and supplies map data for about 80% of cars with in-dash navigation systems in North America and Europe.
Nokia fell 0.5% to €6.40 as of 3:22pm in Helsinki. Shares of TomTom NV, HERE’s Dutch competitor, rose 3.6% to €10.21 in Amsterdam, valuing the company at €2.34bn. TomTom has gained almost 85% this year.
Evercore was Nokia’s financial adviser on the deal, while Hogan Lovells was among advisers to the carmakers group.
Earlier suitors for HERE included Baidu, London-based private-equity firm Apax Partners in cooperation with US online car-booking provider Uber Technologies; a group comprising China’s Tencent Holdings, NavInfo and Swedish buyout firm EQT Partners; US 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 to create the world’s largest supplier of mobile-network equipment. That deal received US antitrust clearance in mid-June.