LONDON Dutch satellite navigation systems pioneer Tom Tom has offered $2.5 billion for Tele Atlas NV, the software group that supplies most of its digital maps.
The board of Tele Atlas said Monday (July 23) it would recommend the offer.
Tele Atlas (den Bosch, the Netherlands) currently generates about 40 percent of its revenue from Tom Tom, but also supplies maps to other satellite navigation equipment suppliers such as Mapquest and Google Maps, and mobile phone companies such as Nokia.
Tom Tom (Amsterdam, the Netherlands) stressed that if the deal goes through, it would continue to provide maps to others.
The company recently announced a partnership with Vodafone plc to add Vodafone's real-time traffic data to Tom Tom's displays in the U.K.
Tom Tom also announced quarterly results a week early that showed net profit leaped to Euros 68 million ($98 million), 81 percent from a year earlier, and kept its 2007 sales forecast of Euros 1.6-1.8 billion ($2.2 billion to $2.5 billion), and said it expects to sell between 8 to 9 million navigation devices this year.
Sales rose 37 percent to Euros 380 million ($524 million), up from Euros 277 million ($383 million) for the same period last year.
The deal would combine Europe's smaller, high-growth rivals to the dominant players in the navigation device and mapping markets: Cayman Islands-based Garmin Ltd., which has operational headquarters in Kansas, and Chicago-based Navteq Corp.
TomTom estimated its market share in Europe is just under 50 percent, and around 20 percent in the U.S.