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Digital mapping and routing company, TomTom, with its Q3 2018 earnings established a successful transformation to counterbalance the decline of personal GPS devices. However, the Dutch company is facing threats from the tech giants like Apple, and Alphabet/Google, since they are developing and expanding the mapping solutions for the automotive industry.
Is it just Telematics business?
With a healthy net cash position, TomTom is planning to sell its growing Telematics business which accounts for most of its market valuation. But, in a report published by TMTFinance, many parties are considering making a bid for the entire TomTom business instead. The potential buyers listed to acquire the Dutch satellite navigation pioneer are Audi, Daimler, Here Technologies, Trimble and Apple.
Apple at risk!
Since TomTom currently provides data for Apple’s maps app, the change in ownership could make it riskier for Apple. Having said that, one way TomTom could get out of plight is to get acquired by the Cupertino giant itself.
Moreover, by putting the Telematics business for sale, the owners of TomTom unwillingly raised the question of a move for the whole business, valued at between €2bn to €2.5bn and has a current market cap of €1.478bn.
Owners hold 44 per cent of the company!
Besides, ING’s experts also pointed out that a possible takeover can only occur with the approval of the company since the founders still hold 44 per cent of the documents.
HERE is in or out?
In a stark contrast to TMTFinance’s report, ING analysts stated that possible takeover by HERE seems unlikely since the competition authorities are unlikely to approve. It’s worth mentioning that HERE has the support of automakers BMW, Daimler and Audi.
Slipped to third
For the past few months, TomTom has been having a rough patch which has seen its market position slip to third place, behind Here Technologies. In this regard, Renault, a TomTom customer, started collaborated with Google leaving the former out of the equation. On top of that, the company lost a significant contract with Volvo, resulting its share price to plummet.
Woe continues for TomTom
It’s worth mentioning here that TomTom’s shares which were traded last year at €9.26 each are now at €6.41. TomTom is listed on the Amsterdam stock exchange, with 54.1% of its shares floated, while its four founders own 44.1% of the business. Treasury shares make up the remaining 1.8%.
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