Nokia To Sell Mapping Service 'HERE' To German Carmakers For EUR2.8 Bln

(RTTNews) - Finnish network equipment maker Nokia Corp. (NOK) Monday said it has agreed to sell its HERE digital mapping and location services business to a consortium of leading automotive companies in Germany, comprising AUDI AG, BMW Group and Daimler AG.

The enterprise value of the transaction is fixed at 2.8 billion euros, and Nokia estimates to receive net proceeds of slightly above 2.5 billion euros. The deal is expected to close in the first quarter of 2016.

In April, Nokia had announced a possible sale of HERE due to the company's proposed combination with Alcatel-Lucent. The announcement of this sale to the consortium concludes that strategic review process.

HERE is developing a location cloud that harnesses the power of data generated by vehicles, devices and infrastructure to deliver real-time, predictive and personalized location services. In the automotive industry, its focus is on developing precise and accurate mapping as well as services that will enable a new class of driver experiences, including highly automated driving.

The company also serves the world's leading enterprises and Internet players, including Microsoft, Samsung and SAP, and offers apps to consumers using Android, iOS and Windows Phone.

Nokia expects to book a gain on the sale and a related release of cumulative foreign exchange translation differences totaling around 1 billion euros.

HERE reported non-IFRS operating profit of 46 million euros on net sales of 552 million euros for the first half of 2015. At the end of June, HERE had 6454 employees.

Nokia plans to report HERE as a discontinued operation from the third quarter of 2015 onwards. It will continue to operate as a business of Nokia until the closing of the transaction. When the HERE transaction is closed, Nokia will consist of two businesses: Nokia Networks and Nokia Technologies.

Rajeev Suri, President and Chief Executive Officer of Nokia, said: "With this step we complete the latest stage of Nokia's transformation...Going forward, we will focus on our planned combination with Alcatel-Lucent. Once that is complete, Nokia will be a renewed company, with a world-leading network technology and services business, as well as the licensing and innovation engine of Nokia Technologies."

Nokia closed in Helsinki on Friday at 6.43 euros.