Nokia has rebuffed an offer by car-hailing service Uber to buy up its mapping business Here for as much as $3 billion, according to a Monday report by The New York Times, citing people with knowledge of the negotiations. The offer may have been too small for the former mobile-handset maker.
Nokia will instead focus on negotiations with a consortium of German carmakers that includes Mercedes-Benz, Audi and BMW. The company is seeking at least $4 billion for Here, Times sources said. Whether Nokia or Uber ended the talks, however, is unknown.
Nokia’s Here service is widely considered a top option among a host of competitors, including Google Maps. The consortium likely views buying Here as a way to protect the navigation services they currently bundle with their vehicles that rely on Nokia’s platform. Any outside company that acquires Here would not only have access to that mapping technology, but also provide an entry to carmakers that have grown increasingly interested in bundling technology in vehicles.
On April 30, Nokia touted the success of its Here business during the first quarter of 2015, reporting to investors that its sales were up 25 percent year over year to 261 million euros ($287 million). Carmakers licensed Nokia’s Here technology for 3.6 million new vehicles during the quarter ending March 31, a jump of 29 percent compared to the same period last year. The Here division’s gross profit hit 194 million euros, rising 21 percent compared to the prior year.
Nokia says Here has up-to-date maps on 196 countries around the world and provides real-time traffic information in 41 countries.
The Here division’s success wasn’t only of interest to Uber, which made a formal $3 billion bid in May, according to the Times. In addition to the carmakers, the Times’ sources say China-based search company Baidu and Internet portal Tencent have expressed interest in the service. It’s unknown how much any of the companies have offered for Here.
In May, Nokia CEO Rajeev Suri acknowledged that his company’s mapping division was in high demand and that he’s received “significant interest” from suitors. While he wouldn’t say which companies were interested in acquiring Here, he said he wanted to give the negotiations “more time,” adding that “we may not end up selling it if we don’t get the right value.”
Nokia is familiar with selling off components of its business. Last year, Nokia sold its devices business, which included mobile phones, to Microsoft for over $7 billion. The sale allowed Nokia to focus on its networking operation, which sells telecommunications and data networking equipment. In addition to Here, Nokia also operates a technologies business that develops and licenses new products and services.
Uber was believed to be interested in Here to improve driving efficiency across its service. The effort is part of a broader strategy on the company’s part to enhance its internal mapping services. Last month, Uber announced that it had acquired part of Microsoft’s mapping technology and aimed to hire approximately 100 engineers from within that division to help it build out its own proprietary platform for driver use.
Indeed, the combination of digital-mapping and car-hailing services is proving extremely important as an increasing number of companies vie to more readily connect riders and drivers and get travelers to their destinations more quickly.
Last week, Google announced that its Waze mapping service had launched a test carpooling service, called RideWith, that relies on Waze’s navigation and mapping features to connect people going in the same direction.
Nokia declined to comment on the report. Uber did not immediately respond to a request for comment.