Garmin Walks Away from TeleAtlas - Agreement through 2015 with NAVTEQ
Garmin announced today that they have signed a 6-year extension to the agreement with NAVTEQ to obtain maps and build innovative map related services. This allows them to have access to maps through 2015, with an option to get a 4-year extension. This ends Garmin’s bid for TeleAtlas. Looks like TomTom just bought itself a mapmaker. In my mind, with this agreement sewn up, it allows Garmin to move forward in an economical way that keeps costs low: 1) No expensive acquisition costs, 2) No employee and company assimilation costs, and 3) No change over from NAVTEQ to TeleAtlas platform related costs.
I would imagine Wall St. will love this, their stock is up almost 20% in pre-market trading activity.
What I am excited about is the collaboration on new mapping capabilities. Garmin has scale to push through new ideas, and they certainly need an answer to MapShare.
Finally, TomTom is going to get the mapping company that they wanted; I assume. The advantages are that they can streamline innovations like MapShare. The downside of all of this is that with this bidding war, Garmin just pushed TomTom to offer about $2 billion more for the TeleAtlas acquisition.
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Posted by Scott Martin at November 16, 2007 8:50 AM
actually the agreement with NavTeq is for 6 years.
Garmin management have proved them self worthy today, they played this mapmaker acquisition game very very well indeed.
Hugo,
Good catch; updated. 6 year extension to current agreement with a 4-year option. Sounds like a deal that a baseball player might want!
-Scott
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