Germany’s big-three premium-brand auto makers are preparing an acquisition bid with Baidu for a majority stake in Nokia’s Here mapping unit, the Wall Street Journal reported, with sources saying the bid values the unit at “considerably more than EUR 2 billion.”
BMW, Audi, and Daimler’s Mercedes-Benz want to band together in order to prevent a company such as Google, Apple or Facebook from gaining control of a key part of the technology needed to run self-driving cars and in-car digital services, the sources said. “The greatest threat to the automobile industry would be if Google developed an operating system for self-driving cars and made it available free to everyone,” the source said. Talks have reached an advanced stage and are likely to conclude within the next two weeks.
Although there are still no specific details such as price and the distribution of specific stakes, the German car makers are aiming to acquire a controlling majority. Baidu and an undisclosed financial investor in the group would acquire minority stakes. Nokia would retain a minority stake. Separately, Audi is expected to announce a “far-reaching cooperation” with China’s Baidu at the China CES consumer electronics show in Shanghai later this month, the person said.
Separately, Audi is expected to announce a “far-reaching cooperation” with China’s Baidu at the China CES consumer electronics show in Shanghai later this month, the person said. Baidu is an important partner because it is creating a high definition map of China, the world’s biggest car market by sales. Google is not allowed to map China. Under the agreement with the German consortium, Baidu can use Here’s technology only in China. Baidu declined to comment.
Nokia, which last month raised the possibility of selling Here, said during its annual shareholders meeting on Tuesday that it could still decide to keep the mapping service. But people familiar with the situation said the company is negotiating to sell most of Here and is confident that the German-led consortium could easily finance and quickly close a deal. A second investor group made up of several undisclosed private-equity investors is looking to finance an acquisition of Here using debt, which one person said could make it difficult for Here to invest in its growth. Nokia declined to comment.
Another person familiar with the car makers’ plans said the consortium of German premium car makers approached German Chancellor Angela Merkel, asking her to encourage the Finnish government to back the German bid.
Another person familiar with those talks said the German car makers, a large customer of the Here service, threatened to stop using the service if it were sold to a company like Facebook or Uber Technologies. The German car makers have since toned down their language, fearing such threats could lead to suspicion they are building a cartel, the person said.
