Status: Withdrawn and Abandoned

Acquirer: NavInfo Co., Ltd., (China); Tencent Holdings Limited (China); GIC Pte (Singapore)

Acquired: HERE International B.V. (Netherlands)

Value: Unknown, potentially US$330 million

Industry: Technology Services; Software

On September 26, 2017, a group of investors comprised of the publicly traded Chinese digital map and software company NavInfo Co., Ltd., the publicly traded Hong Kong internet and technology services company Tencent Holdings Limited, and the Singapore state backed global investment firm GIC Pte. Ltd., announced they abandoned their proposed acquisition of a 10% minority stake in the digital mapping service and software company HERE International B.V. following opposition from CFIUS. (See HERE Press Release, HERE expands into China; provides update on shareholders, Sept. 26, 2017.) The investor group did not release financial information on the investment, but HERE Technologies was acquired from Nokia Corp. in 2015 by major German automotive companies for approximately $3.3 billion, putting the value of a 10% stake around $330 million. (See Bloomberg, Chinese Bid for Stake in Mapping Firm Denied by U.S. Panel, Sept. 26, 2017; see generally Wall Street Journal, BMW, Daimler and Audi Clinch Purchase of Nokia’s Maps Business, Aug. 3, 2015.)

According to a Chinese language press release from NavInfo, the main reason for abandoning the investment was because of CFIUS opposition. (See NavInfo Press Release, NavInfo Terminates Acquisition of HERE Due to Political Reasons, No Impact on Other Collaborations, Sept. 26, 2017 (in Chinese language.)) NavInfo stated that they worked closely with the sellers of HERE Technologies (citing specifically Mercedes-Benz, BMW and Audi) to obtain regulatory approvals. (Id.)  Concerning the CFIUS process, NavInfo’s press release explained that CFIUS “divided the review into two stages, spanning five months,” likely indicating a withdrawal and refiling occurred. (Id., translation of Chinese language original.)  Moreover, during the CFIUS review, “NavInfo and HERE collectively responded to more than 10 rounds of questions, actively communicated, and revised the investment plan.” (Id., translation of Chinese language original.) This included outreach by the CEO of HERE Technologies to CFIUS. (See id.) Because no “regulatory approval was obtained as the review deadline approached . . . . [NavInfo] agreed with the relevant parties to no longer pursue this transaction.” (Id., translation of Chinese language original.)

The proposed minority investment was first announced by the parties in December 2016, at the same time that NavInfo and HERE Technologies announced news of a joint venture agreement in China to pursue “location services for Chinese and global customers.” (Press Release, NavInfo, Tencent and GIC to invest in HERE; companies to develop location services for Chinese market, Dec. 27, 2016.) The joint venture sought to extend HERE’s services to China, including HERE’s Auto SDK automotive product and other mapping and location services for autonomous cars in the Chinese market. (Id.) The December press release stated that “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 joint venture.” (Id.) On September 26, 2017, the same time the parties announced the minority investment was abandoned due to CFIUS opposition, they announced that the “joint venture . . . in China is now operational . . .” (HERE Press Release, HERE expands into China; provides update on shareholders, Sept. 26, 2017.)  NavInfo reported in a separate press release that the joint venture is called “Beijing Xinhan and Technology Co., Ltd.” and will work to service “customers worldwide with comprehensive and high quality services in networking applications, high-precision maps, autonomous driving, among others.” (See NavInfo Press Release, NavInfo Terminates Acquisition of HERE Due to Political Reasons, No Impact on Other Collaborations, Sept. 26, 2017 (translation of Chinese language original.)) NavInfo stated that it and HERE Technologies “will actively seek other cooperation models.” (Id., translation of Chinese language original.)

During the time of the proposed minority investment from NavInfo, Tencent, and GIC, other companies invested in HERE Technologies. On January 3, 2017, Intel Corporation and HERE Technologies announced that Intel will be “acquiring a 15 percent ownership stake in HERE.” (Intel Press Release, Intel to Acquire 15 Percent Ownership of HERE, Jan. 3, 2017.) The status of this investment has not been announced. In addition, on September 16, 2017, HERE Technologies announced a capital alliance with Pioneer Corporation, a Japanese digital entertainment company with product offerings including automotive navigation systems, which will result in a mutual capital investment of HERE acquiring approximately 3% of the common shares of Pioneer and Pioneer acquiring, for the same total subscription price, approximately less than 1% of an ownership stake in HERE. (See HERE Press Release, HERE welcomes Pioneer as new shareholder; HERE to invest in Pioneer, Sept. 19, 2017.) Pioneer and HERE have a preexisting partnership to develop mapping solutions for autonomous vehicles. (See HERE Press Release, HERE and Pioneer/Increment P form partnership to enable global map solutions for the autonomous driving era, June 26, 2017.)