EU: Bridgestone to acquire TomTom’s telematics business

TomTom will remain independent and grow its core digital maps business, its CEO said on Tuesday, January 22,  after the company agreed to sell its fleet management business to the European subsidiary of Japan’s Bridgestone for €910 million (US$1 billion).

Amsterdam-based TomTom faces a turning point after Google broke into the market to supply maps to carmakers last year, striking deals with Renault and Volvo and upsetting a duopoly between TomTom and its traditional larger rival HERE.

“On the one hand (Google’s entry) is scary, but on the other hand it really focuses the mind,” said Harold Goddijn, TomTom’s founder and CEO, in an interview with Reuters.

The Telematics sale price was slightly higher than analysts had estimated when TomTom announced plans to sell it in September, but TomTom shares slid 6.5% to €7.53 after the deal was announced, as questions over the company’s future returned to the fore.

TomTom, which is debt-free, will return €750 million of the Telematics proceeds to shareholders via a capital repayment and keep €160 million to fund further development of its mapping and navigation technology, which is used in Apple maps, among others.

At the price announced on Tuesday, Telematics accounts for almost half of TomTom’s €1.89 billion market capitalization.

Full Content: Reuters

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