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Nokia may tell struggling HERE Maps division to get lost – report
Finnish telecoms giant may put mapping biz on auction block
Nokia may not be done selling itself off in pieces, with sources claiming the Finnish firm may be looking to unload its HERE Maps division.
Bloomberg reports that Nokia has been shopping the unit to a number of potential buyers, among them some private equity firms, a group of German automakers, and even unlicensed taxi app outfit Uber.
Estimates of HERE's value range between $2bn and $4bn. The division reported net sales of €969m ($1.03bn) for its fiscal 2014, which was a 6 per cent gain over the previous year. But it has also operated at a loss for the last few years, particularly in 2014, when it was €1.27bn in the red after taking a €1.21bn ($1.35bn) goodwill impairment charge.
More to the point, HERE's sales for 2014 accounted for just 7.6 per cent of Nokia's total. Now that it has sold its former Devices & Services division to Microsoft, the bulk of Nokia's revenue – 88 per cent – comes from its Nokia Networks segment. It's easy to see how investors could view HERE as an unnecessary distraction from what most of Nokia is all about, which is selling mobile broadband equipment to carriers.
Nokia's debt rating is also lousy – it's been rated as "junk" – and a cash infusion from selling the HERE business could help with that.
But who would buy it? Microsoft might be one possibility. It's the one selling Lumia-branded smartphones now, and on Friday it shipped beta testers a new build of the phone version of Windows 10 that included an integrated Maps app that combines results from HERE with data from Redmond's own Bing Maps.
Whoever snaps up HERE might get it at a steal. Nokia paid $8.1bn to acquire Navteq in 2008, which is four times more than what some analysts value HERE at today.
Nokia getting the price it wants may be a sticking point, though. Bids are expected to start coming in as soon as this month, but sources say the Finns are prepared to call off talks if none of the offers is big enough.
Nokia's shares rose around 4.3 per cent on the news. ®