Intel, computing giant, has moved from partnering to acquiring the Mobileye, a leader in computer vision for autonomous driving technology, for $15.3 billion — the biggest-ever acquisition of an Israeli tech company.
Specifically, “Under the terms of the agreement, a subsidiary of Intel will commence a tender offer to acquire all of the issued and outstanding ordinary shares of Mobileye for $63.54 per share in cash, representing a fully-diluted equity value of approximately $15.3 billion and an enterprise value of $14.7 billion,” the company noted in a statement. The deal is expected to close in about nine months, Intel said.
Mobileye today covers a range of technology and services including sensor fusion, mapping, front- and rear-facing camera tech, and beginning in 2018, crowdsourcing data for high definition maps, as well as driving policy intelligence underlying driving decisions.
This deal will bring under Intel’s umbrella not only a much bigger range of the different pieces that go into autonomous driving systems, but also a number of relationships with automakers. In the call today, Mobileye’s CTO and co-founder Amnon Shashua said the company is working with 27 car manufacturers, including 10 production programs with Audi, BMW and others going into 2016.
“This acquisition is a great step forward for our shareholders, the automotive industry and consumers,” said Brian Krzanich, Intel CEO, in a statement. “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.”
“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,” Ziv Aviram, Mobileye Co-Founder, President and CEO, added. “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.”
Confirming our earlier report, Intel said that Mobileye’s CTO and co-founder, Prof. Amnon Shashua, will lead Intel’s autonomous driving division, which will be based in Israel. Doug Davis, Intel’s SVP, will oversee how Mobileye and Intel work together across the whole company and will report to Shashua.
The negotiations about what stays where for Mobileye and Intel are reminiscent of one of the other big M&A deals in Israel’s tech history, concerning Waze. Originally, Waze was being courted by Facebook, although there were disagreements over where Waze’s staff would be centered: engineering wanted to stay in Israel while Facebook was keen to get the to Facebook’s HQ in Menlo Park. Ultimately that delay led to Google swooping in, agreeing to Waze’s terms, and closing the deal.
Intel has been working officially with Mobileye since last year.
Intel had been a leader in processors at the peak of the PC era, although it has competed hard (and often lost) as smartphones overtook the larger devices as consumers’ computers of choice.
Moving deeper into self-driving technology is part of Intel’s bigger strategy to build up its position in emerging areas of computing. Other verticals that Intel has focused on include connected “objects” (IoT) and virtual and augmented reality. It has been following through on this strategy with acquisitions as well as organic growth.
“The combination is expected to accelerate innovation for the automotive industry and position Intel as a leading technology provider in the fast-growing market for highly and fully autonomous vehicles,” the company continued. “Intel estimates the vehicle systems, data and services market opportunity to be up to $70 billion by 2030. The transaction extends Intel’s strategy to invest in data-intensive market opportunities that build on the company’s strengths in computing and connectivity from the cloud, through the network, to the device.”
Intel has disclosed several other acquisitions in Israel to fill out that strategy, including buying a personal assistant platform from Ginger Software; Omek Interactive for gesture-based technologies; and Replay Technologies for 3D video.