LONDON A bidding war has started for digital map provider Tele Atlas NV as navigation device maker Garmin made an unsolicited Euros 2.3 billion ($3.3 billion) offer for the Dutch group, trumping an agreed bid from rival European market leader for navigation devices TomTom.
The move follows the recent offer by Finnish mobile phone giant Nokia to buy for $8.1 billion Tele Atlas' only major competitor, Navteq.
Both TomTom and Nokia plan to tightly integrate the maps into the design of their navigation devices and phones.
TomTom triggered the consolidation in the sector in July, which in turn led to Nokia's move earlier this month.
Garmin's offer is Euros 24.50 for each share of Tele Atlas, 15 percent higher than TomTom NV's offer of Euros 21.25 a share. Net of the cash on Tele Atlas' balance sheet, Garmin's offer is worth about Euros 2.1 billion and TomTom's Euros 1.8 billion.
Garmin CEO Dr. Min Kao said: "Given the high growth and rapid change the navigation market has undergone to date, we feel that now is the right time for Garmin to move ahead with this proposed combination with Tele Atlas. Together, we believe we can create the best available mapping solutions for our customers around the world. We also intend to make Tele Atlas content available to the entire navigation market on a non-discriminatory basis, promoting healthy competition."
Kao suggested Garmin's larger size meant its offer would allow Tele Atlas more opportunity for growth.
The global market for portable navigation devices is estimated to be worth $4.2 billion this year and to grow to $12.8 billion by 2010, according to market research firm iSuppli.