EU clears road for TomTom to buy Tele Atlas

14th May 2008, Comments 0 comments

EU says takeover of Tele Atlas by Dutch portable navigation device maker TomTom will not harm competition in Europe.

14 May 2008

BRUSSELS - The European Union on Wednesday gave the green light to Dutch portable navigation device maker TomTom to buy digital map maker Tele Atlas, also Dutch, saying that the takeover would not harm competition in Europe.

TomTom makes portable satellite-navigation, or "sat-nav," devices which can be mounted in a car and which tell the driver exactly how to get to any destination. TomTom is the bestselling maker of such devices in Europe.

In order to function, sat-nav devices have to have digitised maps of the country they are in, so that they can then use satellite signals to work out where they are. Tele Atlas makes such maps.

On 2 October, TomTom launched a bid to buy all Tele Atlas' shares. The European Commission, which oversees EU competition laws, decided to investigate the takeover to make sure that it would not give TomTom an unfair advantage in the European market.

The investigation concluded that the merged company would not gain unfair leverage over European markets, as one other company - the US-based Navteq - also makes digital maps.

Moreover, the merged company would have no incentive to limit the sales of Tele Atlas maps to competitors, as the resulting loss of map sales would not be compensated for by a larger number of people buying TomTom sat-nav units, a statement from the commission said.

Finland's Nokia mobile-phone manufacturer is currently bidding to buy Tele Atlas' chief competitor, Navteq. However, the commission is also examining this proposal in the light of competition concerns, with a decision expected by 8 August.

[dpa / Expatica]


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