Garmin has launched a €2.3bn bid to acquire Tele Atlas in an attempt to outshine an earlier offer by TomTom.

Garmin is the world's largest maker of personal navigation devices. TomTom is the second largest vendor in the fast growing segment, and outships Garmin in its European home market.

Tele Atlas is the smaller of the world's two worldwide digital map providers. Nokia agreed to acquire market leader Navteq for €5.4bn in cash in early October.

Analysts had speculated that the recent consolidation in the digital mapping market would attract rival bids.

The Navteq and proposed Tele Atlas acquisitions forced Garmin to put out its offer, the company argued, as the rival acquisitions would force the company to rely on maps supplied by its competitors.

The companies could easily undermine the quality of Garmin's products by delaying delivery of information or refusing to sell the latest updates.

"In the absence of an independent and competitive map duopoly that served the industry well, Garmin must exercise its obligation to provide market leadership, " Garmin said in a statement.

"Garmin believes that it is best equipped to do this through the acquisition of Tele Atlas."

Tele Atlas had previously endorsed TomTom's offer. Shareholders and board members representing 17.4 per cent of the company's outstanding shares committed to tender their shares to the offer when it was announced in July.

Tele Atlas said in a press release that it would review the terms and conditions of the offer. The company's board will meet with Garmin within seven days.

TomTom has not responded to the rival offer, but investors appear to be expecting a bidding war. The news caused TomTom stock to drop by 18.7 per cent. Garmin stock fell by 11 per cent.

Garmin's offer represents €24.5 per share. Tele Atlas stock closed 15 per cent higher at €27.6, indicating that shareholders expect TomTom to raise its offer.