“This purchase shows carmakers are expecting huge new growth in autonomous driving and connectivity,” said Frank Biller, a Stuttgart, Germany-based analyst for LBBW. “They’ve all been cooperating with HERE for maps for a long time, so they know about the quality of the service.”

Supplying HERE’s technology to other carmakers would enable the German partners to tap into a market for automotive data and connectivity that consulting company McKinsey & Co. estimates could surge sixfold from current levels to 180 billion euros by 2020.

Map accuracy

HERE’s map is accurate to within as few as 10 centimeters (4 inches), a level of detail that’s necessary as cars become increasingly able to guide themselves. The division has said it’s working with 10 carmakers on automated driving. Its in-car map software already links to a smartphone app and can learn drivers’ habits, such as picking up a coffee en route to work.

Licensing fees for its maps are HERE’s main source of revenue. The business generated an operating profit of 28 million euros in the first half of this year, Espoo, Finland- based Nokia said. The unit reported a loss of 1.24 billion euros last year, including a goodwill impairment charge of 1.21 billion euros.

Nokia is selling HERE to focus on making mobile-phone network equipment. The sale price compares with the $8.1 billion that Nokia paid in 2008 for map provider Navteq Corp., one of the businesses that it combined to create HERE.

Keeping customers

The carmakers said HERE’s management will be independent and that the company will continue to make its maps available to all customers across industries. The unit has about 6,500 employees and supplies map data for about 80 percent of cars with in-dash navigation systems in North America and Europe.

Nokia fell 0.5 percent to 6.40 euros as of 3:22 p.m. in Helsinki. Shares of TomTom NV, HERE’s Dutch competitor, rose 3.6 percent to 10.21 euros in Amsterdam, valuing the company at 2.34 billion euros. TomTom has gained almost 85 percent this year.

Evercore was Nokia’s financial adviser on the deal, while Hogan Lovells was among advisers to the carmakers group.

Earlier suitors for HERE included Baidu Inc., London-based private-equity firm Apax Partners in cooperation with U.S. online car-booking provider Uber Technologies Inc.; a group comprising China’s Tencent Holdings Ltd., NavInfo Co. and Swedish buyout firm EQT Partners AB; U.S. private-equity firms Hellman & Friedman, Silver Lake Management and Thoma Bravo; and Microsoft Corp., according to people familiar with the matter.

Nokia agreed in April to buy French competitor Alcatel- Lucent SA to create the world’s largest supplier of mobile- network equipment. That deal received U.S. antitrust clearance in mid-June.

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