Garmin drops bid for Tele Atlas

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Dutch satellite navigation device maker TomTom looks set to win the battle for digital map maker Tele Atlas, after rival bidder Garmin walked away from the table.

TomTom, best known for its in-car navigation software of the same name and more recently for its all-in-one GPS satellite navigation devices, sparked interest in Belgian cartographer Tele Atlas when it launched a €1.8 billion (£1.2 billion) offer for the business back in July.

The deal initially received support from the board of Tele Atlas, and looked set to complete unchallenged, until rival sat nav device maker Garmin entered the fray at the beginning of November with an improved offer of €2.3 billion (£1.6 billion), which gained board approval and was subsequently recommended to shareholders.

However, eight days after the Garmin offer, TomTom returned with an improved bid of its own, valuing Tele Atlas, which supplies digital maps not only to TomTom, but to several other navigation and map companies including Rand McNally and Google, at €2.9 billion (£2 billion).

That bid proved too rich for Garmin, which has formally withdrawn its interest, allowing the formal offer period for the TomTom bid to commence.

TomTom had sought Tele Atlas to gain control of one of just two global digital map makers, to reduce its dependence on selling hardware and to protect its main source of mapping data in an increasingly competitive and consolidating market that has already seen map maker NavTeq taken over by Nokia.

"Software revenue will in coming years become the largest growing sales stream. TomTom is now well-equipped," said Keijser Capital analyst Nico van Geest in an interview with Reuters.

TomTom now has until 18 December to secure 80 per cent or more of the available shares in TomTom to make its offer unconditional.

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