German auto makers ready offer for Nokia's map business HERE as deadline looms: Report

Germany's premium auto makers BMW Daimler and Audi are preparing an offer for Nokia's maps business, as binding bids are due by end of Thursday, two sources familiar with the process told Reuters.

The binding offers will be used as a basis to pursue negotiations for making a final offer, one of the sources told Reuters on Wednesday.

Finland's Nokia started an auction of its HERE high-definition maps business while it focuses on completing its 15.6 billion euros ($17.2 billion) takeover of network equipment maker Alcatel Lucent.

Analysts put the potential value of HERE at 2 billion euros to 4 billion euros.

A spokeswoman for Nokia declined to comment in detail about the state of the auction but said: "The strategic review process is ongoing and there is no certainty that a transaction will result from the process."

Germany's carmakers are already large clients of HERE, giving Audi, Mercedes and BMW some leverage in the auction process since any third-party buyer would see the value of HERE decrease if the carmakers stopped using it or switched to a rival.

The German carmakers formed a consortium to buy Nokia's high-definition mapping division which they see as a key tool for bringing self-driving cars to the road. Autonomous and connected cars could evolve into a $50 billion market, analysts at Exane BNP Paribas have estimated.

Autonomous cars can navigate difficult routes by using data gathered from laser sensors to identify obstacles and cross-reference these with data from high-definition maps.

"Nokia has been soliciting indicative offers and is now demanding that interested parties submit a binding offer", a person familiar with the matter said on Wednesday.

Although it remains unclear how many parties are competing, bankers say there is a rivalry between two categories of bidders: the industrials and tech companies.

BAIDU LINK

Last month, sources told Reuters that carmakers had teamed up with private equity firm General Atlantic to ready an offer, for HERE.

At least three bidders have been in the race: German carmakers, a consortium including Uber and Baidu, and a third group including China's Tencent and NavInfo , people familiar with the process have said.

Online transportation services provider Uber is ready to pay $3 billion, the New York Times reported in May, citing people with knowledge of the offer.

The auto companies cannot afford to allow HERE to fall into the hands of a player such as taxi app company Uber, who may block their access to it.

BMW and Daimler declined to comment. Audi could not immediately be reached for comment.

Last month, sources told Reuters that Chinese media, mobile and Internet services firm Tencent, Chinese map maker NavInfo, and Swedish buyout firm EQT Partners AB had formed a consortium.

NavInfo and Tencent were not immediately available for comment. EQT declined to comment.

A financial source also told Reuters last month that private equity firm Apax had joined US-based taxi service Uber and China's Baidu in a third consortium. Uber and Apax declined to comment, Baidu was not immediately available for comment.

For Audi and BMW, winning the auction for HERE while competing with Baidu is also a delicate matter. Last month, Audi and Baidu said they will jointly develop navigation map data, positioning algorithms and point-of-interest functions in China, the world's largest car market.

In September last year, BMW said it was developing autonomous cars together with China's Baidu. (Additional reporting by Eric Auchard, Ilona Wissenbach, Arno Schuetze and Andreas Cremer)

Reuters