Intel will buy Mobileye for more than $15 billion (14 billion euros), the companies said, in a deal signaling the United States computer chip giant's commitment to technology for self-driving vehicles. It also was the firm that developed Tesla's first-generation Autopilot system. The companies are developing a fleet of autonomous electric taxis that could be deployed through Lyft within the next year.
Intel is offering $63.54 per share in cash, valuing Mobileye at about $15.3 billion on a fully-diluted basis, and $14.7 billion in enterprise value. The total value of the deal is now estimated at $15.3 billion. The Qualcomm-NXP deal is expected to close later in 2017, subject to regulatory and shareholder approvals.
In a statement announcing the deal, Intel claims that the market for various vehicle systems could be worth about $70 billion by the year 2030, and the deal with Mobileye puts the chip maker in competition with new-era auto companies such as Tesla, as well as old rival such as Qualcomm, which recently acquired chip maker NXP.
Mobileye NV (NYSE:MBLY) was downgraded by equities researchers at Dougherty & Co from a "buy" rating to a "sell" rating in a research report issued on Monday. Krzanich said by moving Intel's autonomous driving group to Israel provides "an additional retention factor".
Shashua said a number of Mobileye key customers see the move as a positive.
Based on Intel stock's decline of almost 2% by midday in trading Monday, it appears investors are less than enamored with its deal for Mobileye.
"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. The chip maker just announced it intends to purchase Jerusalem-based Mobileye for $15.3 billion.
Mobileye's stock jumped 3o percent Monday before the opening bell. It's the latest push by a major tech company into autonomous vehicles. At the time, Mobileye estimated its products "were installed in approximately 9.7 million vehicles worldwide through December 31, 2015".