There have been severe speculations and multiple rumors about the future of Nokia's HERE unit that deals with maps and navigation, ever since Nokia made it amply clear that they are looking to offload the business. Several names have made the rounds as possible buyers, including Apple, Amazon, Alibaba, Baidu, Sirius XM, Tenecent, Facebook and Uber among others. There have also been strong rumors that German automakers Audi, BMW, and Mercedes are seriously interested in buying the mapping business from Nokia. Looks like that last rumor may have some amount of truth to it, as earlier today, Reuters reported that the three aforementioned rival car manufacturers have apparently joined forces with private equity firm General Atlantic to bid for HERE maps in an effort to buying it from the embattled Finnish telecom equipment maker. Estimates put the value of Nokia's HERE business unit to be anywhere between $2 billion and $4 billion. HERE is the combination of Nokia's mapping and navigation software assets under a single brand, some of which it got by acquiring GPS based navigation company Navteq for $8.1bn in 2008.
According to Reuters, sources within the auto industry who are close to the deal claim that the consortium of investors have already put in a joint offer to Nokia, although, there has been no response from the Finnish company just as yet. The source also claimed that the consortium is apparently mulling raising its bid if the current bid is rejected by Nokia. The group is apparently willing to go higher than their current bid, and "The upper limit is basically what it would cost to build the maps through other means, by partnering with another player or going it alone, for example", according to the source. Another interesting point to note is that issues regarding ownership details of the newly forged entity is still a work in progress and are yet to be addressed fully. While each of the three automakers are willing to invest 700 million Euros ($780 million) apiece, the percentage stakes are yet to be worked out, even though General Atlantic is said to be keen on a 30% stake. One of Reuter's sources from within the financial industry claimed that the four entities are open to the idea of other partners joining their consortium provided the controlling stake remains with the current partners.
The automakers believe that they have a good chance of closing the deal, mostly because they contribute more than 50% of HERE's revenues and the mapping company is reliant on its customers - the automakers - to provide essential information to enable them to develop new-age safety features like electronic collision-avoidance systems. If however, for some reason the deal falls through, the carmakers might turn to HERE's rivals like Dutch navigation software company TomTom, according to Reuters' source from within the industry. The auto-industry insider signed off with a statement that might be interpreted as a thinly veiled threat, saying "We are not out of the race as far as we know and Nokia would also have something to worry about if we were".