U.S. chipmaker Intel Corp. (NASDAQ: INTC) decided to purchase driverless technology firm Mobileye N.V. (NYSE: MBLY) for $ 15.3 billion on Monday, placing itself for a prevailing role in the autonomous-driving division after missing the market for mobile phones. The $ 63.54 per share transaction is the largest technology conquest in Israel's history and the first purchase of a company primarily emphasized in the self-driving sector. Intel will assimilate its automated driving group with Mobileye's operations, with the merged entity being controlled by Mobileye Chairman Amnon Shashua from Israel.
Intel Chief Executive Brian Krzanich stated that the acquisition, which joins Intel's processors with Mobile's computer vision, was parallel to merging the "eyes of the autonomous car with the intelligent brain that actually drives the car." Mobileye makes up 70 percent of the global market for driver-assistance and anti-collision systems. It employs 660 workers and had net income of $ 173.3 million in 2016. Intel said it anticipated the transaction to close within the next nine months and to immediately boost its non-GAAP earnings per share and free cash flow. The price signifies a premium of around 33 percent to Mobileye's Friday closing price of $ 47 a share.
"It's an area where the company (Intel) has had very little presence - the automotive market, and this is a tremendous opportunity to get them into a market that has significant growth opportunities," said Betsy Van Hees, an analyst at Loop Capital Markets who has a "buy" rating on Intel shares. "Mobileye's technology is very critical ... The price seems
fair," she added.
Due to the fact that Mobileye's Shashua will stay in charge and the merged entity will be established in Israel, analysts said they are going to be more challenging for competitors to support the mobile offer for Mobileye. Shashua and two other senior Mobileye executives position to do well by the deal; Together they own approximately 7 percent of the company. Shmuel Harlap, Israel's largest car importer and one of Mobileye's initial investors, also holds a 7 percent stake. Yossi Vardi, seen as the godfather of Israeli high-tech, said the transaction was a big endorsement of the whole sector.
Automakers and their manufacturers have been developing alliances in the contest to acquire self-driving cars, the sector that once appeared to be the science-fiction vision but is transitioning into a reality month after month. Mobileye and Intel are already working with German automaker BMW (BMWG.DE) on a project to put a fleet of around 40 self-driving test vehicles on the road towards the second half of this year. While Intel is recognized for hardware chips and Mobileye for collision detection software, their merger assures to develop the most complete portfolio of technologies required for driverless vehicles, including cameras, sensor chips, in-car networking, roadway mapping, machine learning and cloud software, As well as the data-centers needed to manage all the data involved.
Mobileye's relationships with automakers, prevailing suppliers and STMicroelectronics will remain uninterrupted, the companies stated in their statement, and Mobileye's current product roadmap will not be affected. Founded in 1999, Mobileye made its mission to diminish vehicle injuries and fatalities. After obtaining an investment of $ 130 million from Goldman Sachs in 2007, it is listed on the New York Stock Exchange in 2014.