German car makers close to clinching Nokia maps deal for $2.74-3.29 billion: sources
By Edward Taylor and Eric Auchard
FRANKFURT/BERLIN (Reuters) - Germany's premium car makers are close to a deal to buy Nokia's HERE map business for between 2.5 billion and 3 billion euros ($2.74 billion to $3.29 billion), but a final agreement hinges on the question of who owns the patents which help self-driving cars talk to mobile networks, two sources familiar with the deal told Reuters on Tuesday.
The purchase of HERE, which has been valued at between 2 billion and 4 billion euros, could also require multi-year pledges to make further investments to improve map data quality. The deal is expected to be finalised by the end of July, if the two sides can settle the intellectual property issues, the two sources familiar with the transaction said.
So-called connected and self-driving cars, linked to mobile phone networks, can perform intelligent functions such as recalculating a route if data about a traffic jam or an accident is transmitted to update the car's intelligent mapping system.
So much real-time data is processed by self-driving cars to navigate successfully that telecom network infrastructure has emerged as a major component of connected cars, and as a sticking point in deal discussions, auto industry sources said.
Self-driving and connected car services could evolve into a $50 billion market, analysts at Exane BNP Paribas say.
A consortium of Daimler, parent of Mercedes-Benz, BMW and Volkswagen's (VOWG_p.DE: Quote) Audi division want outright ownership of all relevant patents owned by Nokia related to mapping, auto industry sources said.
But the Finnish mobile network equipment maker is seeking to keep control of some patents for how mobile devices connect to networks, be they computers, phones or newer types of network-connected cars, industrial, corporate or agricultural equipment.
Spokesmen for Nokia, Mercedes-Benz parent Daimler, BMW and Volkswagen's Audi declined to comment. Continued...