According to people that have knowledge of the bidding process, Germany’s top three luxury automakers are now at a stand-off with Nokia as they bid for the Finnish company’s mapping services Here.
Talking to Reuters on condition of anonymity because of the sensitivity of the subject, two auto industry sources and two financial sources said the negotiations between Finland’s telecom company Nokia and a consortium formed by BMW, Audi and Mercedes-Benz are still ongoing but have reached quick sand while crucial details including price and structure are being completed. The automakers are not as much under pressure in terms of pricing for the Here mapping business because of signs that rival bids have fallen out of favor. Analysts believe the potential value of the unit is between two and four billion euros. “Talks have not broken down, but they are at a delicate stage of brinkmanship,” commented one of the insiders, who declined to be named because the discussions are still confidential.
The automakers see high-definition maps, such as the ones provided by Here, being a key aspect of the development of upcoming autonomous vehicles. German carmakers are among the major clients of Here, giving BMW, Audi and Mercedes some leverage during the auction process. Other interested buyers could lose value if the automakers decided to stop using the service and swicth instead to a different mapping supplier, such as Netherlands’ TomTom. The Scandinavian network equipment producer decided to review its divisions in a bid to focus more on the core mobile network gear business as it mulls a 15.6 billion euro takeover of French-American competitor Alcatel Lucent.