Intel to buy driverless-car sensor maker Mobileye in $15bn deal
Intel has agreed to buy Israeli driverless-car technology firm Mobileye for $15.3bn (£12.5bn), positioning itself for a dominant role in the fast-moving autonomous driving sector.
The $63.54-per-share cash deal marks the largest purchase of a company solely focused on the self-driving sector and could significantly alter the competitive landscape among key technology and systems suppliers, including chipmakers Nvidia and Qualcomm and systems integrator Delphi Automotive.
Mobileye's shares jumped 30 per cent to $61.30 in late morning US trading, while Intel's shares were down 2 per cent. Shares of Delphi, which has partnerships with both companies, were up 3 per cent.
The deal underscores the expanding alliances between automakers and their suppliers as they race to develop self-driving cars.
While Intel is known for hardware chips and Mobileye for collision-detection and mapping software, the merger promises to create an expanded portfolio of technologies needed for driverless vehicles. It also strengthens Intel's position in the sector against rival chipmakers Nvidia and Qualcomm.
The Intel-Mobileye portfolio includes cameras, sensor chips, in-car networking, roadway mapping, machine learning, cloud software and data-fusion and management.
"It's an area where [Intel] has had very little presence - the automotive market, and so this is a tremendous opportunity for them to get into a market that has significant growth opportunities," said Betsy Van Hees, an analyst at Loop Capital Markets.
"Mobileye's technology is very critical... The price seems fair," she added.
The offer represents a premium of about 33 per cent to Mobileye's closing price of $47 on Friday.
Intel will integrate its automated driving group with Mobileye's operations, with the combined entity being run from Israel by Mobileye chairman Amnon Shashua.
Intel chief executive Brian Krzanich said the acquisition was akin to merging the "eyes of the autonomous car with the intelligent brain that actually drives the car."
Mobileye supplies integrated cameras, chips and software for driver-assist systems - the building blocks for self-driving cars - to more than two dozen vehicle manufacturers.
In an interview in January, Shashua said: "If you want to build a truly autonomous car, this is a task for more than one player... The idea is to have a number of partners to share resources and data."
Mobileye was an early supplier of vision systems to Tesla, but the two companies had an acrimonious and public break-up last summer after the driver of a Tesla Model S was killed while operating the vehicle using Tesla's Autopilot system.
Intel said it expects the vehicle systems, data and services market to rise to $70 billion by 2030.
Mobileye, founded in 1999, accounts for 70 percent of the global market for driver-assistance and anti-collision systems. It employs 660 people and had adjusted net income of $173.3m last year.