Garmin Drops Out of Tele Atlas Bidding

GPS maker's shares soar after allowing rival TomTom to acquire map provider
By Kevin Spak,  Newser Staff
Posted Nov 17, 2007 2:12 PM CST
The nuvi 360, left, and the StreetPilot c550 are two of the most recent GPS units released by Garmin, shown outside the company's headquarters in this July 7, 2006 file photo, in Olathe, Kan. (AP Photo/Reed...   (Associated Press)
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(Newser) – Garmin, the world’s top GPS producer, dropped its $3.3 billion bid for mapmaker Tele Atlas yesterday, allowing rival TomTom to seal the deal. That may prove a long-term disadvantage for Garmin, but investors love the non-deal, sending shares up 16%, their best gain in five years. “There’s relief,” one analyst said. “The bidding had gone to a level that people didn’t like.”

The GPS market is fast consolidating, with Nokia recently acquiring Navteq, the only other global mapper. After turning down Tele Atlas, Garmin inked a multi-ear deal to license maps from Navteq, but they may someday regret relying on competitors for maps. “The strategic disadvantage…will continue as an overhang,” an analyst told Bloomberg. TomTom, meanwhile, is positioned to license maps out, providing more revenue.