EU concerned over TomTom's Tele Atlas takeover

Satellite navigation software and hardware maker TomTom has received a blow to its plans to acquire digital map maker Tele Atlas, after European regulators raised concerns over the takeover.

Sources familiar with the matter have confirmed that the European Commission is sending a "statement of objections" to TomTom in relation to its takeover plans. There is growing concern about a lact of competition and choice in the digital map market after Nokia bought map maker Navteq in October 2007 for $8.1 billion (£4.05 billion)

TomTom had offered some remedies to meet concerns within the European Commission that the deal would be anti-competitive. While TomTom submitted its remedies the formal notice of objections hung in the balance.

The statement does not, however, mean the deal will be rejected. Instead, it means that TomTom will have to come up with better remedies. The deadline for a decision is 5 May.

TomTom made its initial move on Tele Atlas, which makes digital map products for TomTom, as well as other customers including Google, back in July 2007. Its initial offer of €1.8 billion (£1.2 billion) was trumped by a counter offer of €2.3 billion (£1.6 billion) from rival sat nav maker Garmin.

In response, TomTom made an improved offer of €2.9 billion (£2 billion) in November 2007 that was eventually accepted by Tele Atlas after Garmin ended its interest.

Experts say that if a statement of objections is issued it slows and complicates the process because it creates a formal, written record of problems with the deal.

Click here for an interview with the chief executive of Tele Atlas.

(Additional reporting by IT PRO)

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