Nokia is selling its mapping business and there are some interesting bidders in the mix. At least four potential buyers including Facebook and a consortium of German carmakers representing BMW, Audi and Daimler, are interested a German magazine reported on Wednesday.
Manager Magazin also confirmed an earlier report, possibly the most interesting, that online taxi service Uber is looking at the books of Nokia’s mapping division, named HERE. U.S. private equity firm Hellman & Friedman is also reportedly interested.
The most interesting revelation is definitely that Uber is in the mix . The red hot taxi hailing service currently uses Google Maps and counts Google as a significant investor. The notoriously aggressive company may feel that its partnership with the search giant is not working or damaging its ability to extract top dollar from the company in a buyout or merger scenario. Both companies are known to be hyper aggressive and are very well funded.
By running with Google Maps, Uber provides Google with significant amounts of data on where its taxis are coming from and going to. Such data could be useful to Google if it were to start up an Uber rival, say powered by one of its self driving cars. It could also be used as leverage in negotiations about further financing, as Google would have a very tight read on where and how fast the company is growing.
According to Manager Magazin, the book value of the unit is $2.15 billion. A more bullish brokerage estimate by Inderes Equity Research values HERE at $4.7 billion to $7.5 billion, using on a sum-of-parts methodology.
Facebook may also have ambitions to own high quality mapping data. The objective for Facebook is not nearly as clear as either Uber or the German automakers but its huge resources mean it could do such a deal and figure out its exact strategy at a later date. A high quality data asset like HERE does not come up often and the social media giant may want to take advantage of the opportunity while it can. The company’s local advertising system and increasingly mobile applications could benefit from the additional data.
Nokia, Facebook and Uber declined to comment on the report.
The Finnish company’s mapping and location business is built on the back of an $8.1 billion acquisition in 2008 of U.S-based Navteq, a maker of geographic information systems used in the automotive industry.
Nokia made the purchase to add maps to its phones, as a way to differentiate its products from other high-end phone makers including Apple.
The HERE unit, one of Nokia’s three remaining businesses after the sale of its handsets unit, has in recent years refocused to supply maps to carmakers yet given the company is going to pursue mobile phones again as early as this year its an interesting time to sell.
This may be a signal that future Nokia phones will offer tight integration with Google and its Android operating system.
Location technology allows car manufacturers to build navigation and safety features into newer “connnected cars”, helping them to navigate obstacles and other vehicles, and is considered a pre-condition for the eventual emergence of driverless vehicles. While such plans would not immediately happen for Facebook all the other bidders are known to be highly interested in self driving vehicles.
Acquisition of HERE by a tech company would have interesting industry implications are the company supplies online maps to major Internet companies including Amazon.com, Microsoft, Yahoo and Baidu.