You are here
Home >> Latest Posts >> News >> Nokia News >> HERE Maps >> Nokia decides to sell HERE to Auto-makers consortium for EUR 2.8 billion

Nokia decides to sell HERE to Auto-makers consortium for EUR 2.8 billion

HERE AutoSo, it’s final now! Nokia has revealed today that an agreement to sell HERE to the consortium of Auto-makers have been inked. We reported yesterday that talks between Nokia and consortium have reached to an advanced stage. The EUR 2.8 Billion deal is expected to close in the first quarter of 2016 and seems to be a bit of disappointment in terms of monetary value for Nokia investors, who have expected higher deal value for a profitable and growing business.

Press Release:

Nokia completes next stage of transformation with agreement to sell HERE to automotive industry consortium at an enterprise value of EUR 2.8 billion

Espoo, Finland – Nokia today announced an agreement to sell its HERE digital mapping and location services business to a consortium of leading automotive companies, comprising AUDI AG, BMW Group and Daimler AG (the “Consortium”). The transaction values HERE at an enterprise value of EUR 2.8 billion with a normalized level of working capital and is expected to close in the first quarter of 2016, subject to customary closing conditions and regulatory approvals. Upon closing, Nokia estimates that it will receive net proceeds of slightly above EUR 2.5 billion, as the purchaser would be compensated for certain defined liabilities of HERE currently expected to be slightly below EUR 300 million as part of the transaction. Nokia expects to book a gain on the sale and a related release of cumulative foreign exchange translation differences totaling approximately EUR 1 billion as a result of the transaction.

In April 2015, Nokia announced a review of strategic options for HERE in light of its proposed combination with Alcatel-Lucent. The announcement of this sale to the Consortium concludes that strategic review process.

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.”

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. In the automotive industry, where it serves most of the world’s leading automakers, its focus is on developing precise and accurate mapping as well as services that will enable an entirely new class of driver experiences, including highly automated driving. The company also serves the world’s leading enterprises and Internet players, including Microsoft, Samsung and SAP, and offers highly rated apps to consumers using Android, iOS and Windows Phone.

“I believe today’s announcement is a very good outcome for HERE, its customers and employees. The new ownership structure of HERE will allow us to accelerate our strategy, further scale our business and fulfill our intent to become the leading location cloud company across industries,” said HERE President Sean Fernback.

HERE has been a separate operating and reportable segment for financial reporting purposes for Nokia with a non-IFRS operating profit of EUR 46 million on net sales of EUR 552 million for the first half of 2015, and a non-IFRS operating profit of EUR 31 million on net sales of EUR 971 million for the full year 2014. In reported terms, HERE generated an operating profit of EUR 28 million for the first half of 2015, and an operating loss of EUR 1 241 million for the full year 2014, with the latter including a EUR 1 209 million charge for the impairment of goodwill. At the end of June 2015, HERE had 6 454 employees. Nokia plans to report HERE as a discontinued operation from the third quarter of 2015 onwards. HERE will continue to operate as a business of Nokia until the closing of the transaction.

Upon closing of the HERE transaction, Nokia will consist of two businesses: Nokia Networks and Nokia Technologies. Nokia Networks will continue to be a leading provider of broadband infrastructure software and services. Nokia Technologies will continue to provide advanced technology development and licensing. Nokia’s proposed combination with Alcatel-Lucent is expected to close in the first half of 2016, subject to customary closing conditions and regulatory approvals, and will create an innovation leader in next generation technology and services for an IP connected world.

Nokia suspended its capital structure optimization program in conjunction with the announcement of the proposed combination with Alcatel-Lucent. As previously stated, Nokia intends to evaluate the resumption of a capital structure optimization program after the closing of the proposed Alcatel-Lucent transaction.

Going forward Nokia will focus on Nokia Networks and Nokia Technologies, that has seen some interesting launches in Nokia N1 and Nokia OZO and may soon see expansion to Digital health with wearables.

Nayan has more than 10 years of experience of covering Technology and innovations. He is a big Nokia fan and Tech disruptions aficionado. He loves to review new cool gadgets and writing about Android, iOS, Gadgets and general Technology stuff. He has been associated with other well-known Tech sites WinCentral and GadgetOx since long. He currently sports a Lumia 950 XL and Nexus 5X. Other interests include listening to Nu-Metal Hits and Kick-Boxing. Write to him at Email: [email protected]
  • Is Nokia keeping some share in the business or just giving it all away? Won’t be surprising if HERE Maps disappear from mobiles. No profit and interest there for the car makers.

    • Prasenjit Singh Bist

      I also though Nokia will keep a minority stake like they did with Vertu but so far the reports suggest it’s 100% sale of ownership. But Nokia keeps all the patents that’s cool.

      • Riff Raff

        “But Nokia keeps all the patents that’s cool.” Where did you read that? I don’t see any reference to patents or intellectual property–either retention or transfer.

        • Yep. I’d like to know this too. For a business that is sold, Nokia needs to hand over the patents relevant to it, i suppose.

          • Prasenjit Singh Bist

            No it’s not necessarily like that for instance look at the recent Nokia D&S sales Nokia kept the patents, MSFT licensed. Just in mapping alone Nokia have been may be filing patents since 2004-2005 and then they may have gone so many re-org so some time patents were under Nokia Devices then Here etc. Also a lot of patents came from Navteq as Nokia absorbed the firm.

            Okay a correction.. i edited the comment

            Old Navteq IP, Metacarta IP and other Here filed apps will go to Here. But I am wondering what happens to around 200+ patents in navigation on smart devices and services delivery filed by Nokia Corporation. May be these stay with Nokia. But then it’s a very bad deal, the valuation is too bad. But they delayed the agreement as tehre was patent related discussions. Hmm… crap.

        • Prasenjit Singh Bist

          You are correct there is patent transfer all old Navteq , metacarta patents are gone with the deal. Sorry that’s a correction but so then did Nokia keep the 200+ navigation patents more relevant to devices?

  • Prasenjit Singh Bist

    okay don’t feel bad guys it was a very good decision in the end proves Nokia is run by sane people. A mistake a colossal mistake of 8 BEUR finally corrected and 6500 people have a secured future.

    • Agreed. Hopefully there won’t be layoffs. It’s sad to hear when employees who put their blood in a business are kicked away.

      • Prasenjit Singh Bist

        Yes all jobs saved and Here got the best future for them. Their main business was cars and not devices as the scale was lost and see Google maps are going nowhere actually.

        Here maps are the industry standard and they have full backing of automobile companies who don’t want to become puppets to Apple and Google. They trust Nokia and it’s open business model. Nokia has no strategic significance to maps and they never had else they would have never given away maps for free after buying it for 8 BEUR and if they were trying too be Google they were damn idiots good that OPK and Vanjoki are gone. The worst would have been job cuts or cash crunch as mapping is a serious sucker for money and now they are in proper hands who need that kind of data and have business case for investment. With these deal German car makers bought themselves a future.

        • nokwin20

          Nokia did not pay 8 billion eur for navteq. They paid 5.6 billion eur when the dollar was 1.4/1.5 to 1 euro making the dollar value 8.1 billion. Big difference.

          • Prasenjit Singh Bist

            “The total purchase price is approximately 5.7 billion Euros, or approximately 5.4
            billion Euros net of NAVTEQ’s existing cash balance”
            – OPK, Nokia Group President and CEO

            Okay given currency exchange rate fluctuations fine, but nevertheless wasted billions for no reason. It’s like Nokia management wanted sauna they got it then other tech firms and smaller acquisitions and the courage grew and grew one day OPK and Vanjoki said let’s see how a billion dollar deal looks like and boom Navteq purchased.


        • Because licensing is a profit in itself, no? See they were making money from licensing maps now. Having them on smartphones and everywhere makes them better i believe. People search for places, they know which places are most searched, they can be remapped more frequently and more deeply.
          Licensing Maps is/was similar to what Nokia tech does with patents. I still will never understand the point of selling a valuable asset. But you might be right.

          • Prasenjit Singh Bist

            No they were not making a good money or even profit from sales to devices only earnings were from automobile and other services firms like MSFT, FB, Amazon and SAP. Though the earnings from SAP is negligible or better zero that is at best some HANA API support for map bases analytics. when devices volumes are high you can go and show an internal sales and profit but the revenue and profit were low under Nokia. Here should fully focus on Automobiles wand these automakers have the money and motivation to spend.
            Here made zero from WP, Android and iOS, free apps with no advertising model is a drag on pocket.