BERLIN: Three German premium carmakers on Monday agreed to buy Nokia Here, a digital mapping business, for €2.8bn to secure their future in the era of driverless and connected cars and head off a challenge from Silicon Valley.
Putting aside their decades-old rivalry Volkswagen’s Audi unit, BMW and Daimler said they would acquire the Finnish group’s high-definition map and location-service division, to guarantee its “long-term availability” as an open and independent platform.
The carmakers require highly accurate maps in order to provide personalised location-based services for the connected car and for the advanced-driver assistance systems that will one day form the basis of self-driving vehicles.
“High-precision digital maps are a crucial component of the mobility of the future,” Dieter Zetsche, Daimler chief executive, said in a statement.
When Nokia put Here up for sale in April, the carmakers feared it could fall into the hands of a tech company, which could try to monopolise the data and cut them out of the race to provide new customer services.
The carmakers are paying slightly more than €2.5bn for Nokia Here and will acquire almost €300m in liabilities, providing an enterprise value of €2.8bn. Split three ways the sum will make only a small dent in the carmakers’ large cash piles.
“The deal may be viewed as a defensive move, but it is probably a sensible one,” Arndt Ellinghorst, analyst at Evercore ISI, wrote in a note last month.
Nokia Here competes with Google and Dutch company TomTom and has about 55 per cent market share for in-car navigation systems globally, according to Technavio, a research firm.
Driverless cars will require maps providing road information down to the nearest centimetre and are set to combine these with data generated by vehicle cameras and sensors and shared via the cloud.
The groups plan to pool this real-time data — eg information on icy roads — and insisted Here would be run as an open platform to the benefit of all Here’s customers. The consortium vowed not to interfere in operational matters.
