Intel acquires self-driving Mobileye for $15 billion
The US chip giant wants to lead autonomous vehicles market
17 March, 2017
Automaker BMW, Intel and Mobileye have laid the ground work for a project of self-driving cars.
The US chip giant Intel has agreed to buy Israeli driverless technology firm Mobileye for $15.3bn, the largest ever acquisition of an Israeli high-tech company. The $63.54 per share cash deal is the world's biggest purchase of a company solely focused on the autonomous driving sector. Mobileye accounts for 70% of the global market for advanced driver-assistance and anti-collision systems.
"Mobileye brings the industry’s best automotive-grade computer vision and strong momentum with automakers and suppliers," Intel CEO Brian Krzanich said in a statement. "Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers.”
Intel said it expected the transaction to close within the next nine months and to immediately boost its non-GAAP earnings per share as well as its free cash flow. The two companies are already collaborating with German automaker BMW on a project to put a fleet of around 40 self-driving test vehicles on the road in the second half of this year.
For a decade, Mobileye has relied on Franco-Italian chipmaker STMicroelectronics to produce chips which the Israeli company sells to many of the world’s top automakers for its current, third-generation of driver-assistance systems. However, while it was working with BMW, Mobileye also teamed up with Intel for its fifth-generation of chips that aim to be used in fully autonomous vehicles and are scheduled to be delivered around 2021.
Founded in 1999, Mobileye made its mission to reduce vehicle injuries and fatalities creating chips and software for autonomous vehicles, such as data analysis and mapping for self-driving systems.
After receiving an investment of $130m from Goldman Sachs in 2007, it listed on the New York Stock Exchange in 2014. It has a market value of $10.6bn.
Last October, Qualcomm announced a $47bn deal to acquire NXP, the largest automotive chip supplier, putting pressure on other chipmakers seeking to make inroads into the market for autonomous driving components, including Intel. The Qualcomm-NXP deal, which will create the industry's largest portfolio of sensors, networking and other elements vital to autonomous driving, is expected to close later in 2017, subject to regulatory and shareholder approvals.
Mobileye, which employs around 600 people, had adjusted net income of $173.3m in 2016.
In an email to employees, Mobileye president and CEO Ziv Aviram and fellow co-founder Amnon Shashua said they will continue to run the company as they have previously.
"An interesting journey is ahead," reads their email. "We always wanted to change the world - now we have better means of doing so."
Intel says the deal will help accelerate innovation in the self-driving vehicle market, forecast to reach $70bn by 2030. However, Intel is part of a crowded field of tech companies and automakers seeking to get their autonomous vehicles and self-driving systems on the road.
Last month, Ford announced it would invest $1bn over five years into startup Argo AI, with a plan to deliver their first autonomous car by 2021. Meanwhile, Google and Uber have struck deals with Fiat and Volvo, respectively, to create self-driving vehicles.