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TomTom, probably the world’s most successful GPS company has decided that paying Tele Atlas each year for digital mapping is a bad move… and instead is going to pay 1.8 billion Euros and buy the company.

TomTom is pretty flush with cash at the moment and this would seem to be a good move especially as they’re looking at new services and features in their products. They probably also have a close eye on Nokia’s online GPS system and the likes of Google Maps, which use the most up to date mapping available at any given time and update themselves as they go.

A possible strategic query over the proposed deal lies in the fact that Tele Atlas also supplies maps to Nasdaq-listed Garmin, TomTom’s main rival.

TomTom said Tele Atlas would honour existing contracts, raising the question of why TomTom would allow a wholly-owned company to supply its main competitor with technology that will compete directly with its own.

Source: Financial Times