HERE: US disapproval of acquisition 'disappointing'

World
Europe

Amsterdam-based mapping firm HERE Technologies said on Friday that US authorities' disapproval of Chinese investors' bid to buy a minority of its stake is "disappointing", while asserting that the firm will continue to pursue commercial collaborations with its Chinese partners.

"While it is of course disappointing not to be able to welcome Tencent and NavInfo as shareholders, we are nonetheless excited to be pursuing our commercial collaborations with these two leading companies. China is one of the most exciting markets in the world and we look forward to serving Chinese customers in the years ahead," said HERE spokesman James Etheridge.

HERE announced on Tuesday that Chinese digital map provider NavInfo, Chinese Internet giant Tencent and Singapore sovereign wealth fund GIC are no longer pursuing a transaction previously announced in last December.

Under that deal, the three Asian investors were to jointly acquire a 10-percent stake from HERE's indirect shareholders, Audi AG, BMW Group and Daimler AG.

"The decision follows a regulatory review process during which the parties determined there was no practicable path to receiving the necessary approval for the transaction to proceed," said HERE in its press release.

Cooperation continues

When the deal with Chinese buyers was blocked, HERE announced that it still has the intention to welcome new investors beyond Audi, BMW, Daimler, Intel and Pioneer in the future.

"We do anticipate bringing in other investors in the coming months. It remains the intention for Audi, BMW and Daimler to reduce their combined holding from about 84 percent to below 50 percent in the long-term," Etheridge said.

The spokesman also confirmed that HERE keeps expanding into China. "Our joint venture with NavInfo is operational, which means we can start integrating China mapping coverage into our products and services," he said.

A touch screen automobile dashboard monitor displays HERE software. Photo/VCG

"For example, with China map coverage, our HERE Auto SDK product will become even more useful for global automakers who are selling their cars in China. We are working together with NavInfo to enable a robust digital mapping infrastructure for autonomous cars."

Tencent is exploring the use of mapping and location platform services from HERE in its own products and services both in China and internationally. "With Tencent, our exploration work continues," said Etheridge.

CFIUS’s 'black box' reviews

CFIUS, or the Committee on Foreign Investment in the US, withheld approval of the deal after a two-phase review that lasted five months, according to NavInfo.

CFIUS is a multi-agency panel authorized to review national security implications of acquisitions of any US business by a foreign person. Its "black box" reviews are confidential and the reasons supporting any approval or disapproval are not released.

HERE develops detailed three-dimensional maps for location-based services and self-driving vehicles. It has more than 200 offices in over 55 countries and regions, including 24 in the US.

In January 2016, CFIUS blocked the Dutch company Philips' plan to sell its lighting businesses to Asian buyers. Philips has divisions based in California.

Philips CEO Frans van Houten said he was "very disappointed about this outcome as this was a very good deal" for both Philips and the buyers.

Earlier in September, US President Donald Trump blocked a Chinese firm from buying an American chipmaker.

China's Ministry of Commerce commented that conducting security checks on foreign investments in sensitive sectors is a nation's legitimate right, but it should not be used as a tool for protectionism.

Source(s): Xinhua News Agency