German Automakers’ Consortium Only One Left In The Race To Acquire Nokia Corporation (ADR) (NOK)’s HERE
Nokia Corporation (ADR) (NYSE:NOK)’s HERE business has reportedly lost one potential buyer – Uber. The taxi services company is apparently out of the race to acquire HERE. The development leaves a consortium of German automakers as the frontrunner in the battle for HERE. However, the exit of Uber may also dilute Nokia’s bargain for a premium price for its HERE business.
Various companies had been mentioned in connection to the acquisition of HERE, among them Microsoft Corporation (NASDAQ:MSFT). However, a group made up of Volkswagen, BMW and Daimler appears to be the serious contender. There are reports that the price of the HERE business remains one of the sticking points between Nokia and the German luxury carmakers. The other issue delaying closing of a deal is how to go about restructuring HERE once it has been purchased.
HERE may fetch less for Nokia
While Nokia Corporation (ADR) (NYSE:NOK) may eventually sell HERE, the company may not get top dollar for the asset. Analysts had earlier estimated that HERE could fetch between $2.2 billion and $4.4 billion for Nokia. However, such a lofty buyout price for HERE now looks remote with Uber out of the race. The reason is that the German automakers won’t be hard-pressed to pay a premium price for HERE because of reduced competition.
Potential buyers showing lack of interest
When it emerged that Nokia was putting HERE up for sale, Baidu Inc (ADR) (NASDAQ:BIDU) and Uber were being mentioned among the potential buyers. Uber had already reportedly made its offer of $3 billion for HERE. On the other hand, Baidu seemed to be interested in teaming up with the German automakers.
Acquisition of HERE will likely boost the automated driving project of the German carmakers. The companies already use HERE technology in their dashboard systems.
Nokia can as well keep HERE
Although Nokia Corporation (ADR) (NYSE:NOK) is open to sell HERE, the company doesn’t appear to be under pressure to do so. Its stance is that it will only sell HERE if the price being offered is attractive. Otherwise, Nokia could as well revamp HERE and pursue new opportunities with it. The company already has several self-driving projects underway in the HERE division.
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