Car manufacturers Audi, BMW and Daimler, which reportedly clubbed together to make an indicative bid for HERE, Nokia’s digital mapping business, may need outside financial help if they are to fend off deep-pocketed competition.
According to Reuters, “some investment bankers” said they hoped private equity could join up with the automotive companies and create an industrial consortium, which would not be dominated by one particular company.
The report adds that the three German carmakers could probably justify paying around €700 million each, which would match HERE’s book value of around €2 billion ($2.2 billion), but that sum is unlikely to be enough.
Last week, taxi service Uber reportedly submitted a $3 billion bid for HERE.
Apple and Facebook are also in the frame for Nokia’s mapping unit, which means the price could go even higher.
Samsung, Alibaba, Tencent, Yahoo, Baidu and a US private equity firm are reportedly in the mix too.
If comments made by Daimler’s CFO Bodo Uebber to Handelsblatt (quoted by Reuters) are anything to by, then German car manufacturers appear willing to go the extra financial mile in their pursuit of HERE.
“We are watching the situation closely,” he said. “High-definition maps are a prerequisite for autonomous driving.”
HERE’s most recent quarterly numbers showed strong revenue growth. In Q1 2015 the business saw net sales jump by 25 per cent.
Nokia, reports Reuters, has hired advisors from Evercore to test the market for potential buyers and solicited a second round of indicative bids.