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Last Updated: Monday, 23 July 2007, 11:33 GMT 12:33 UK
Tom Tom to buy its map supplier
A Tom Tom satellite navigation system
Tom Tom sold 1.8 million sat-navs in the last three months
Dutch satellite navigation systems maker Tom Tom wants to buy its main map supplier, Tele Atlas, for 1.8bn euros ($2.5bn; 1.2bn).

The board of Tele Atlas says it will recommend the offer.

It hopes to use Tom Tom's 10 million sat-nav systems to generate automatic feedback that will allow them to provide daily map and route updates.

It comes as Tom Tom released figures showing three month net profit rising a better-than-expected 55% to 68m euros.

Tele Atlas currently generates about 40% of its revenue from Tom Tom, but also supplies maps to other sat-nav makers, websites such as Mapquest and Google Maps, and mobile phone companies such as Nokia.

There is some concern among analysts that if the transaction goes ahead Tom Tom may lose some revenue from other sat-nav makers, who will not want to buy from a competitor.

The systems have been one of the biggest electrical growth areas in recent years - Tom Tom sold 1.8 million of them in the last three months.


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