BY Richard Summerfield
Intel Corp announced yesterday that it was to acquire Israeli driverless technology company Mobileye in a deal worth $15.3bn. The deal is another show of confidence in the nascent driverless automobile space.
According to a statement announcing the deal, Mobileye’s shareholders will receive $63.54 per share in cash, making the deal the biggest ever acquisition of an Israeli technology company. The deal is expected to close in the next nine months, pending regulatory approval and certain other closing conditions. Mobileye’s shares closed at $47.27 on Friday in New York.
Once the merger has been complete, Mobileye’s current chief technology officer and co-founder, Professor Amnon Shashua, will lead Intel’s autonomous driving division, which will be based in Israel. Doug Davis, Intel’s senior vice president will oversee how Mobileye and Intel work together across the whole company and will report to Professor Shashua going forward.
Intel estimates the vehicle systems, data and services market will be worth as much as $70bn by 2030. The deal for Mobileye will allow them to position themselves at the forefront of the emerging – and disruptive – driverless technology.
Intel, synonymous with personal computers, has seen its standing negatively impacted by the proliferation of smart devices, which have overtaken PCs in popularity and usage.
“This acquisition is a great step forward for our shareholders, the automotive industry and consumers,” said Brian Krzanich, Intel's chief executive. “Intel provides critical foundational technologies for autonomous driving including plotting the car’s path and making real-time driving decisions. Mobileye brings the industry’s best automotive-grade computer vision and strong momentum with automakers and suppliers. Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers.”
The acquisition of Mobileye comes after a period of cooperation between the two companies; Intel – along with Delphi Autmotive – began working on an affordable driverless car with Mobileye in November 2016.
“We expect the growth towards autonomous driving to be transformative. It will provide consumers with safer, more flexible, and less costly transportation options, and provide incremental business model opportunities for our automaker customers,” said Ziv Aviram, co-founder, president and chief executive of Mobileye . “By pooling together our infrastructure and resources, we can enhance and accelerate our combined know-how in the areas of mapping, virtual driving, simulators, development tool chains, hardware, data centers and high-performance computing platforms. Together, we will provide an attractive value proposition for the automotive industry.”