TomTom offers $2.5 billion for map maker Tele Atlas

TomTom is currently the world's largest manufacturer of car navigation devices, but doesn't seem content to settle there, and has just put a $2.5 billion bid in for Tele Atlas, which provides maps for the likes of MapQuest, Google Maps, and of course navigation devices aplenty. TomTom currently accounts for around 40 percent of Tele Atlas' business, and says the deal would allow for improved maps and new features like daily map updates and better routing. TomTom would operate Tele Atlas as an independent business unit, and keep offering maps to other manufacturers -- who might take issue with their map dollars falling right into a competitor's pocket. If everything goes as planned, the two companies should be getting hitched by the end of 2007.

[Lucas @ Jul 23rd 2007 10:00AM]

Crappy Tele Atlas maps have kept me from buying a Tom Tom in the US.

They give those willing to do the research a bad feeling about Tom Tom.

[pkiy53151 @ Jul 23rd 2007 10:08AM]

FYI- Navteq supplies the maps for both Google Maps and MapQuest.

[Bob @ Jul 23rd 2007 3:11PM]

Actually, both use Tele Atlas maps. For example, if you look at Riga, Latvia, in Google Maps or Buenos Aires, Argentina, in Mapquest you will see the Tele Atlas copyright.

[Leo @ Jul 23rd 2007 10:12AM]

Wasn't Microsoft planning of buying TomTom earlier this year?

[Joe @ Jul 23rd 2007 10:47AM]

Google should buy TomTom and Tele Atlas. Then start shipping gTomToms with 700 Mhz transceivers in them...

[Cameron Bell @ Jul 23rd 2007 10:14AM]

Yeah, it clearly says Navteq at the bottom of the google maps screen. Probably a smart move for TomTom though.

[Zoltan Gyenge @ Jul 23rd 2007 10:24AM]

To close the dispute, certain locations are covered by Navteq while others by TeleAtlas. Google Maps uses both (and a few others too, but in a much smaller extent).

Check European locations to check.

[John @ Jul 23rd 2007 11:36AM]

If nothing else, this certainly puts NavTeq in play for acquisition. Lots of possible suitors: Garmin, Google, Microsoft, perhaps some private equity outfit...

[SteveMB @ Jul 23rd 2007 4:17PM]

TomTom is currently the world's largest, gayest, and most suckiest manufacturer of car navigation devices.

[TIMMAH! @ Jul 23rd 2007 4:47PM]

I wonder if this will improve the quality of their data?

[Juan @ Jul 23rd 2007 6:38PM]

Probably good news for Navteq, if other manufacturers become leery of buying Tele Atlas products.

[John @ Jul 24th 2007 10:23AM]

I wouldn't be too happy about this as a Tele Atlas share holder. TomTom is about 30% of TA's revenue, but Tele Atlas rely on competitors of TomTom for the remaining 70%. Navteq will be the main benefactor if they complete this acquisition.

Navteq would be foolish to let itself be bought by another PND company. They could become the only independent map provider in the market, as it's currently pretty much a duopoly with Tele Atlas and Navteq.

[Joe Mobile @ Jul 24th 2007 6:59PM]

The financial metrics of the deal look bleak when considering Tele Atlas' current operating approach. But there are definitely operating efficiencies that can be realized when merged with TomTom's hardware. I did a brief post on the topic on my blog:
http://www.thegpsinsider.com/2007/07/24/tomtom-deal-spells-the-end-for-orange-tele-atlas-vans/

[Partenza Consulting @ Jul 25th 2007 1:54PM]

See full analysis here: http://www.gisuser.com/content/view/12237/.

Given the 3-yr. return TA's investors got on their $210M investment, and that this could be just the opening bid for TA they end up winning either way. For TomTom, they are buying an asset that's commoditizing with the likelihood that they will drive away all of the non-GIS revenue currently being provided by TomTom competitors like Mio. If anti-trust regulators were to approve this (50-50 chance), NAVTEQ is the biggest winner with huge pricing power. I think another suitor could emerge with broader reach such as Google/Nokia/Microsoft to push a connected solution across all LBS/navigation verticals.