TomTom to buy map maker Tele Atlas for £1.2bn

Dutch satellite navigation company TomTom has announced plans to acquire digital mapping specialist Tele Atlas in a deal thought to be worth €1.8 billion (£1.2 billion).

The deal is expected to complete by the end of this year, subject to approval from shareholders, after which Tele Atlas will continue to operate as a separate business unit, focusing on the creation and licensing of digital mapping products that benefit both businesses and consumers alike as core navigation aids.

The acquisition will enable Tele Atlas to expand its geographic reach and will improve user experiences for current and future customers by incorporating feedback from TomTom's 10 million-plus GPS device installed base into the map production process, improving coverage and developing new features such as daily updates and intelligent routing.

"We think that the navigation industry is going to change dramatically in the next few years as end customers will give ever increasing importance to intelligent routing and continuously updated maps," said Harold Goddijn, TomTom's chief executive

"By integrating customer feedback into the Tele Atlas map manufacturing process, we will be able to considerably enhance the user experience and further increase all Tele Atlas and all TomTom's customers' satisfaction. We will supply all companies wanting to rely on the improved maps for their PNDs, wireless handsets, in-car systems, internet services and in-house routing services."

Alain De Taeye, co-founder and chief executive of Tele Atlas, added: "The TomTom-Tele Atlas partnership signals a new era in the digital mapping industry. The combination of TomTom's customer feedback tools and Tele Atlas' pioneering map production processes allows Tele Atlas to dramatically change the way digital maps are continuously updated and enhanced. The result will be a completely new level of quality; content and innovation that helps our partners deliver the best navigation products. This transaction is not only very attractive to our shareholders but demonstrates our longstanding commitment towards all of our partners and customers to deliver the best digital map products available."

However, concerns over the deal have been voiced by TomTom competitors that also buy their maps from Tele Atlas.

Just last month, TomTom announced a partnership with Vodafone aimed minimising UK drivers' congestion headaches with a traffic information system.

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