Don’t you love the drama? Less than a month after Tom Tom finalized a $2.5B bid for Tele Atlas, Garmin trumps with a $3.3B offer. This puts the Tele Atlas board in a very uncomfortable position. The strategic fit with Tom Tom is much stronger - both companies are based in the Netherlands and most of Tom Tom’s devices use TA data. But the board has a fiduciary responsibility to TA shareholders and would have no choice but to accept the new offer, if the bid is indeed apples to apples. On the other side of the table, Garmin almost exclusively uses Navteq data. I’m not sure how deeply integrated the data is, but it won’t be a trivial process to change horses. And here’s the kicker - Garmin won’t make the offer official until December 4th, the same say the Tom Tom bid expires.
How’s this for a possible soap opera: Tom Tom loses Tele Atlas and switches to Navteq for licensing data. Garmin gets TA, overpays and has a nice goodwill write-off in a few years. Nokia ends up the winner, despite a mammoth $8.1B price for Navteq, since mobile LBS is the future. Meanwhile, Google launches an open source mapping program that makes all of this consolidation seem laughable in hindsight. It could happen…
