TomTom NV will sell its Telematics fleet-management business to tire manufacturer Bridgestone for $1 billion, as teh company is gearing up to battle the likes of Alphabet Inc. in bringing mapping technology in car dashboards.
In September, the Dutch company said it was exploring a sale of Telematics, which delivers vehicle-related data and intelligence for fleet management and connected car services.
The Telematics business accounted for 18 percent of TomTom’s 2017 sales.
"We don’t have big plans for acquisitions," said TomTom Chief Executive Officer Harold Goddijn, "but we want to keep a healthy amount of cash on our balance sheet for bolt-on acquisitions, should the chance arise."
Bridgestone, the world’s largest tire maker, is speeding up product development for connected and intelligent cars, combining tires and sensors to collect road conditions and tire information such as the amount of wear.
With the Telematics purchase, Bridgestone plans to gather data from 860,000 units of vehicles that currently use TomTom’s digital service to develop products and improve tire maintenance service, it said in a statement to Tokyo Stock Exchange. The sale is expected to close by the end of the second quarter of 2019, and won’t have a major impact on Bridgestone’s current fiscal year earnings, it said.