Overview:
- US chip manufacturer Intel has reached an agreement to acquire Israeli driverless car technology company, Mobileye, for $15.3 billion as it looks to strengthen its position in a burgeoning market it estimates will be worth €70 billion by 2030.
- Mobileye, which makes sensors and cameras for automated cars, is based in Jerusalem, registered in the Netherlands and trades on Nasdaq having launched its IPO in 2014, raising around $900 million in the largest US IPO by an Israeli company yet.
- The deal will see Intel combine its automated car unit with Mobileye and headquarter the business in Israel.
- Intel's takeover of Mobileye will be completed by one of the US buyer's subsidiaries, which will acquire the Israeli company's shares for $63.54 each through a tender offer.
- The value of the deal represents a 34% premium on Mobileye's closing share price on the last trading day before the deal was signed.
- Intel intends to finance the deal with cash.
- Intel and Mobileye already work together and are collaborating with car maker BMW on a driverless car project which should see 40 functioning test vehicles in 2017.
- Globally, technology and automotive companies are competing to gain share in what is becoming a crowded driverless car market; in 2015 Audi, BMW and Daimler teamed up to acquire Nokia's mapping technology for €2.8 billion.
- Intel said it expects the deal to close within nine months.
- Should the deal complete as expected, it will be the largest inbound acquisition of an Israeli company to date.
- Citibank and Rothschild are acting as financial advisors to Intel, Raymond James & Associates is advising Mobileye.
Ben Naylor - Regional editor