Santa Clara, Calif.-based Intel Corp (NASDAQ: INTC) said it agreed to acquire Jerusalem-based Mobileye NV (NYSE: MBLY), a global leader in autonomous driving computer vision, machine learning and mapping for $63.54 per share in cash, representing an equity value of $15.3 billion and an enterprise value of $14.7 billion.
The combination is expected to position Intel as a leading technology provider in the fast-growing market for highly and fully autonomous vehicles, with a market opportunity potential for Intel of up to $70 billion by 2030.
The combined global autonomous driving organization, which will consist of Mobileye and Intel’s Automated Driving Group, will be headquartered in Israel and led by Prof. Amnon Shashua, Mobileye’s co-founder, chairman and CTO.
“This acquisition is a great step forward for our shareholders, the automotive industry and consumers,” said Brian Krzanich, Intel CEO. “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,” said Ziv Aviram, Mobileye co-founder, president and CEO.
As cars progress from assisted driving to fully autonomous, they are increasingly becoming data centers on wheels. Intel expects that by 2020, autonomous vehicles will generate 4,000 GB of data per day, which plays to Intel’s strengths in high-performance computing and network connectivity. The complexity and computing power of highly and fully autonomous cars creates large-scale opportunities for high-end Intel Xeon processors and high-performance EyeQ4 and EyeQ5 SoCs, high-performance FPGAs, memory, high-bandwidth connectivity, and computer vision technology.
The deal is expected to be accretive to Intel’s non-GAAP EPS and free cash flow immediately. Intel intends to fund the acquisition with cash from the balance sheet.
The deal is expected to close within the next nine months. It has been approved by the Intel and Mobileye Boards of Directors and is subject to regulatory approvals and other closing conditions. Inte’s proposed tender offer is not subject to any financing conditions.
Citi and Rothschild Inc. serve as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP serves as legal counsel to Intel. Raymond James & Associates Inc. serves as financial advisor and Morrison & Foerster LLP serves as legal counsel to Mobileye.
Photo: Prof. Amnon Shashua, co-founder, chairman and CTO, Mobileye.