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Chinese investors buy stake in mapping firm HERE

by December 27, 2016 General

FRANKFURT (Reuters) – Chinese mapping firm NavInfo <002405.SZ>, internet group Tencent <0700.HK> and Singapore’s sovereign wealth fund GIC are buying a 10 percent stake in digital maps company HERE, the latest in a string of Chinese acquisitions in Europe.

Germany carmakers Audi , BMW and Daimler bought HERE from Nokia for 2.55 billion euros ($2.6 billion) last year to create an alternative digital mapping business to Google .

Under the deal announced on Tuesday, the carmakers will reduce their combined ownership of HERE by 10 percent, HERE and the buyers said in a statement.

They did not disclose financial details of the deal, which they expect to close in the first half of 2017.

Intelligent mapping systems are seen as a key for self-driving cars, which are equipped with street-scanning sensors to measure traffic and road conditions. The real-time data gathered can in turn be shared with other map users.

Nokia bought the company at a time when drivers were starting to switch from navigation devices such as those made by Garmin and TomTom to using smartphones to provide directions. Nokia sold it to the German carmakers last year to focus on its telecoms equipment business.

HERE had been aiming to find new partners by the end of the year and was in discussions with dozens of possible investors, including , Microsoft and Bosch [ROBG.UL].

HERE said it will now form a joint venture with NavInfo to extend its products to China using NavInfo’s data and services.

Tencent will use HERE’s mapping and location platform services in its own products, both in China and internationally.

The deal comes after a string of high-profile takeover approaches in Europe, particularly in Germany, though Chinese overtures have not always been welcome.

Home appliance maker Midea <000333.SZ> bought industrial robot firm Kuka in a 4.5 billion euro deal in May, in what was the biggest Chinese deal for a German industrial technology company.

China’s Fujian Grand Chip Investment Fund withdrew a 670 million euro bid for chip equipment maker Aixtron this month after the United States blocked the acquisition of its U.S. division on national security grounds and German authorities withdrew their approval.

Germany and China have become involved in an increasingly public dispute about access to each others’ markets, with China complaining about unfair scrutiny of its acquisition targets in Germany, and Germany wanting a more level playing-field for its firms in the world’s second-largest economy.

(Reporting by Maria Sheahan and Harro ten Wolde; Editing by David Clarke)