Friday April 11, 09:42 AM
TomTom seeks to ease EU antitrust worries over Tele Atlas deal - sources
BRUSSELS (Thomson Financial) - Satellite navigation group TomTom NV. is offering to license out map databases to alleviate European antitrust concerns over the company's proposed $4.6 billion takeover of map maker Tele Atlas NV., sources
told Thomson Financial News.
A source said the licensing arrangement could be viable, with the length of such an arrangement still to be determined.
The source said TomTom would prefer licensing Tele Atlas (Amsterdam: TA.AS - news) ' map database to a third party over selling the assets, which could devalue the company.
'From TomTom's point of view if it can get this licensing thing done and get something for it ... they will comply to make it work,' the source said.
The source named digital map company AND International Publishers NV. as a possible partner.
The commission wants to safeguard competition in the personal navigation technology industry, and is concerned the market will be dominated by only two major players, TomTom and U.S. digital map maker Navteq Corp (NYSE: NVT - news) .
Another source said the commission is no longer asking for 'physical' remedies -- such as the selling the map database -- but wants 'behavioural' remedies, which could include database updates and contractual agreements.
A third source said earlier remedy proposals were too expensive for the company and selling key assets would make the deal unworkable. Analysts have also said that selling the database would push up prices in the medium to long term.
The deadline for TomTom to submit remedies to the commission expired at midnight on Thursday, sources said.
The commission would not comment on these issues.
Sources suggested data access will be a big concern when remedies are offered because the market is so concentrated at a wholesale level.
The commission opened an in-depth inquiry into the deal in November (Frankfurt: A0S9N7 - news) last year after its initial market investigation found the proposed merger raised serious competition concerns. Since then, the commission has extended the deadline for the inquiry at the parties' request.
A legal source previously told TFN the deal should be cleared on or before the deadline of May 21.
TomTom and Tele Atlas were unavailable for comment on Thursday.
At the end of March, the commission opened an in-depth investigation into Finnish mobile telecoms group Nokia Oyj (Xetra: 870737 - news) .'s proposed acquisition of Navteq. The deadline for its decision is August 8.
The commission said this deal raises issues that are similar to the Tele Atlas takeover.
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