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02:05 BST, May 9, 2015Uber Technologies has made a bid for Nokia’s “HERE” mapping business, according to a new report.
The New York Times said, citing “three people with knowledge of the offer”, that Uber is offering as much as $3 billion for Nokia’s mapping business.
The WSJ described HERE as “the most advanced digital mapping service in the world.”
Acquiring the mapping business would allow Uber to quickly match drivers with customers.
Currently Uber relies on Google Maps, Apple, and other resources for mapping data. The acquisition would free the company from Google’s mapping licenses.
Analysts told the NYT that acquiring HERE would give Uber “access to a fully established digital mapping business.”
While Google Maps is the popular mapping data service in the US it isn’t the market leader abroad. According to NYT, Nokia’s navigation system has an 80 percent market share for in-car GPS.
Jamie Moss, an analyst at the technology research company Ovum in London, told NYT:
“It’s extraordinarily difficult to get this type of mapping data. Other than Google, HERE is one of the few companies that can offer this data right now.”
Uber is not the only company interested in acquiring HERE
NYT said that a consortium of German automakers (BMW, Audi and Mercedes-Benz) teamed up with the Chinese search engine Baidu to make an offer.
A private equity firm has also submitted a separate bid, according to the report.
Earlier this week Nokia Chairman Risto Siilasma said:
“I’d like to stress that the review will not necessarily lead to selling of HERE. We strongly believe in the possibilities to develop HERE also as part of Nokia.”
How much is HERE actually worth?
According to Reuters, Inderes Equity Research values HERE at between €4.4 billion and €6.9 billion.
In a note to investors Inderes said:
“We consider a 3 billion dollar bid as insufficient … It would not take into account HERE’s market position, growth opportunities, technologies and profit growth potential,”
Adding:
“With the current growth pace brought by the car industry, we estimate that HERE will make more than 400 million euros of annual operating profit after two to three years.”