TomTom wins EU OK for Tele Atlas bid

Personal navigation device make TomTom NV Wednesday won European approval Wednesday to buy mapmaker Tele Atlas NV.

Netherlands-based TomTom has built up a 29.9 percent stake in Tele Atlas since it started bidding for the Dutch digital mapmaker last summer in a deal worth 2.9 billion euros ($4.5 billion).

Nokia Corp. then followed with a $8.1 billion bid for Tele Atlas's only major rival, Chicago-based digital mapmaker Navteq Corp, in a deal that is also still under review by European Union antitrust regulators.

The European Commission said its careful probe of the TomTom deal looked at whether the new company would be able to hike prices or limit access to the digital maps used by other portable navigation device makers.

"The Commission found that the merged company would be unlikely to pursue these strategies because its ability to restrict access to digital maps ... would be limited by the presence of an upstream competitor, Navteq," it said.

The new company "would have no incentive to restrict access to digital maps because the sales of digital maps lost by Tele Atlas would not be compensated by additional sales of personal navigation devices," it said.

Experts believe that navigation will get better in the future as mobile devices automatically relay information from the field to instantly update digital maps and plan routes for other users _ a system that will require close integration of maps and devices.

Sales are booming _ TomTom sold 2 million personal navigation devices in the first three months of this year from a year ago as prices drop to around 117 euros ($187) per device. TomTom earns fell sharply in the first quarter due to low pricing power.

The navigation-device companies that own the mapmakers may have a competitive advantage.

After Nokia appeared to have the Navteq deal locked up, device maker Garmin bid on Tele Atlas, forcing TomTom to pay more. TomTom had increased its initial offer price by almost 50 percent.

Garmin signed a long-term deal with Navteq guaranteeing access to its maps for the coming decade, and neatly dropped out of the bidding.