Uber Bids $3 Billion for Nokia’s ‘Here’ Mapping Service

Taxi service Uber is trying to buy Nokia’s Here maps submitting a $3 billion bid, according to some anonymous sources.

According to a report by the New York Times, Uber is trying to buy Nokia’s Here maps, the main competitor to Google Maps.

New York Times reports that according to three anonymous people with knowledge of the offer, Uber has submitted a bid for Here owned by Finland’s Nokia. By the way, it was rumoured that the company was planning to sell Here.

A consortium of automakers such as BMW, Audi, and Mercedes-Benz, represent the main competitor to Uber. Moreover, the German automakers are going to partner with the Chinese search engine Baidu on the offer. Also, according to a person with knowledge of the matter, the German consortium wants to give others access to Nokia’s mapping service, under a licensing agreement. So, the business could maintain its global reach being the major rival to Google Maps.

“Mapping data is an important long-term asset for the auto industry,” said Jeremy Carlson, an analyst at IHS Automotive, in Los Angeles. “It makes sense that they would want to protect it.”

Last month, Nokia started a strategic review of Here. Risto Siilasmaa, Nokia Chairman, noted that there were no predetermined results of the review. He also added that the company was not a forced seller.

“I’d like to stress that the review will not necessarily lead to selling of HERE. We strongly believe in the possibilities to develop HERE also as part of Nokia,” he said.

According to Equity Research’s sum-of-the-parts calculation, the value of the unit is between 4.4 billion euros and 6.9 billion.

“We consider a 3 billion dollar bid as insufficient … It would not take into account HERE’s market position, growth opportunities, technologies and profit growth potential,” Inderes, which has a “reduce” rating on Nokia, said in a note to investors, reports Reuters.

“With the current growth pace brought by the car industry, we estimate that HERE will make more than 400 million euros of annual operating profit after two to three years.”

About an 80 percent global market share for built-in car navigation systems is held by Nokia’s mapping business. Moreover, millions of dollars are spent every year to update the maps. According to company records, the unit’s annual income amounts to $1.1 billion, or less than 8 percent of Nokia’s total sales in 2014.

“It’s extraordinarily difficult to get this type of mapping data,” said Jamie Moss, an analyst at the technology research company Ovum in London. “Other than Google, Here is one of the few companies that can offer this data right now.”

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