Business Insight Zone

Garmin and TomTom are in a bidding match to buy the digital mapping outfit Tele Atlas.

Tele Atlas to review TomTom’s sweetened bid

Dutch digital map company Tele Atlas, which is at the centre of a bidding war between navigation device makers Garmin and TomTom, said on Wednesday it would review TomTom’s revised offer.

Tele Atlas said in a statement it had received the intended bid from TomTom, raised to 30 euros per Tele Atlas share from a previous 21.25 euros, valuing the company at about 2.9 billion euros ($4.2 billion).

If you haven’t been following this story, it has everything to do with Nokia’s recent agreement to shell out $8.1 billion (an amount that Nokia keeps in its checkbook for just such contingencies) to buy NAVTEQ — which has built the biggest digital mapping database and which competes head-to-head with Tele Atlas.

Conveniently enough, NAVTEQ topped our latest Hoover’s Index list, so we profiled it in both text and video on our Hoover’s Index page.

Garmin in particular doesn’t want to be put over a barrel by a NAVTEQ-owning Nokia. The cell-phone giant could make life difficult for the GPS device maker, especially since (a) Garmin currently pays to use the NAVTEQ database in its own navigational devices, and (b) Nokia has been introducing GPS-enabled phones that could eat up a chunk of Garmin’s turf.

What’s at stake in the future: more and better interactive wireless location-driven applications. At the moment, it’s easy to have your Garmin device or Nokia smartphone to show you the map for a particular address. In the future, it will be much easier to get an answer to fuzzier questions along the lines of, “Hey, we’re here in Minneapolis for the conference, and we want Chinese food — where can we get Chinese food around here?”

The beneficiaries: NAVTEQ and Tele Atlas, of course. Their products have value to begin with, but any product will command a higher premium when it has a very particular value to certain bidders. It’s a nice place to be in, if you happen to have a giant mapping database in your hip pocket.