€2.3bn Garmin offer raises acquisition price

Digital map provider Tele Atlas wants TomTom to match Wednesday's takeover offer by Garmin.

Garmin and TomTom rank as the world largest and second largest developers of personal navigation devices respectively. TomTom in July launched a €2bn bid to acquire Tele Atlas, but on Wednesday was outbid by a €2.3bn offer from Garmin.

Contractually, Tele Atlas is allowed to cancel the July agreement if it receives a superior offer, but can only do so after it allows TomTom to match the offer. It TomTom does so, Tele Atlas intends to recommend its share holders to accept TomTom's bid over Garmin's.

TomTom did not respond to a request for comment. The Dutch firm has until 8 November to raise its offer.

Tele Atlas is considered a crucial asset to both TomTom and Garmin. The firm is the world's second largest provider of digital maps after Navteq. Nokia acquired Navteq early October for €5.4bn.

Maps from Navteq and Tele Atlas are used not only for personal navigation devices. Both firms also provide the data used by digital mapping services such as Google Maps, Microsoft's Live Search Maps, Yahoo Maps and MapQuest.

Both Garmin and TomTom 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.