BMW, Daimler und Audi have agreed to sell a 10 percent stake in HERE to NavInfo, Tencent and GIC, aiming to further broaden their business in China. The planned transaction would result in NavInfo, and Tencent, together with GIC (a leading global investment firm) take a 10 percent stake in HERE, thereby further broadening the company’s shareholder structure.
The transaction is expected to be completed in the first half of 2017, subject to regulatory approvals. Germany’s luxury carmakers bought HERE from Nokia for €2.55 billion ($2.6 billion) last year to create a platform for developing self-driving cars and to secure their access to intelligent high-precision mapping systems.
In December 2016, HERE, NavInfo and Tencent announced their intention to form a strategic partnership to develop and offer best-in-class location services for the Chinese market. The planned strategic partnership between HERE, NavInfo and Tencent includes:
The planned formation of a joint venture in China: HERE and NavInfo intend to form a 50:50 JV in China enabling location services for Chinese and global customers across a range of industries. Based on this cooperation, HERE, a provider of maps and location services in almost 200 countries, would extend its services to China making use of a wide range of NavInfo data and services.
- HERE and NavInfo plan to deploy and localize HERE’s Auto SDK, a flexible and modular software development toolkit for embedded in-car experiences, for the Chinese market with its specific requirements.
- HERE and NavInfo intend to collaborate on the creation and provisioning of high definition mapping and location services for autonomous cars to ensure a consistent, industry-leading, global solution for a joint customer base.
- HERE and NavInfo intend to extend the range of HERE Internet of Things solutions such as fleet management, on demand services and asset tracking to the Chinese market based on a platform operated by the JV. The planned JV is subject to regulatory approvals by the Chinese authorities.
- Tencent utilizing HERE in its own products and services: Tencent will explore the use of mapping and location platform services and tools from HERE in its own products and services both in China and internationally.
- Product improvements and enhancements: HERE and Tencent will work together to improve both companies’ products to deliver even better experiences to their customers and users and will explore new product and technology development opportunities.
The planned business collaboration between HERE and Tencent is subject to regulatory approvals in relevant jurisdictions.
HERE CEO Edzard Overbeek said: “Our intention has been to broaden our shareholder base to reflect how location intelligence will fuel invention and expansion across different industries in all parts of the world. We are therefore excited to welcome NavInfo and Tencent both as strategic investors who share our vision of the future and as partners with whom we will create attractive new services for the Chinese market. We also welcome GIC as a financial investor who values the long-term prospects of the company.”
NavInfo CEO Patrick Cheng said: “The automotive industry is on the eve of revolution to autonomous driving and alternative energy. We are excited about joining forces and uniting market leaders to deliver outstanding value and take our industry to the next level. NavInfo and HERE have a more than 10-year cooperation history, and are now both in transformation phase to extend our heritage in traditional navigation to intelligent location services and autonomous driving solutions for a global customer base.”
Tencent Vice President of Mobile Internet Group Julian Ma said: “The strategic partnership with HERE demonstrates our commitment to connect our users with best-in-class services. Combining HERE’s world-leading location intelligence technologies with Tencent’s social strength, unique understanding of user behavior and broad location data ecosystem, this collaboration further enhances Tencent’s location services. It also facilitates Tencent’s exploration of future technologies including autonomous driving and artificial intelligence.”
Chief Investment Officer at GIC Private Equity, Choo Yong Cheen, said: “As a long-term value investor, we are confident HERE is well-positioned to extend its success in automotive space to areas of IoT, smart cities and fleet management. We believe this strategic collaboration with NavInfo and Tencent will generate good momentum for its global expansion and its development of HAD (Highly automated driving) Map.”
Self-driving cars need maps to navigate, and use sensors to create services such as a system for monitoring road conditions and finding parking spaces by using vehicle-mounted cameras and sensors to scan the road ahead. The German carmakers have developed their own prototype of self-driving vehicles and bought HERE intending to get rid of their dependence on mapping data from software giant Google which has also developed a self-driving vehicle.
China is on track to overtake the U.S. as the largest market for premium cars. Alliances with local players in Asia are the best solutions for German automakers to expand new services such as autonomous driving in the world’s largest automotive market.