Garmin and TomTom are the world largest and second largest developers of
personal navigation devices. TomTom launched a €2bn bid in July to acquire Tele
Atlas, but was outbid on 31 October by a €2.3bn offer from Garmin.
Advertisement
Contractually, Tele Atlas is allowed to cancel the July agreement if it
receives a better offer, but only after allowing TomTom to match the offer.
If TomTom does match the offer, Tele Atlas intends to recommend its share
holders to accept the bid over Garmin's.
TomTom did not respond to a request for comment. The Dutch firm has until 8
November to raise its offer.
TomTom and Garmin consider Tele Atlas a crucial asset. Tele Atlas is the
world's second largest provider of digital maps after
Navteq,
which was acquired
by Nokia in
October for €5.4bn.
Maps from Navteq and Tele Atlas are used for personal navigation devices, and
provide the data used by digital mapping services such as
Google
Maps,
Live
Search Maps,
Yahoo
Maps and
MapQuest.
Garmin and TomTom have both stated that they will allow Tele Atlas to
continue to operate as an independent entity.
Direct competitors, however, could potentially receive second-grade maps or
have deliveries delayed to put them at a competitive disadvantage.
Do you agree?
Have your say on this article