Intel has snapped up an Isreali technology firm specialising in driverless car tech in a multi-billion dollar deal to accelerate its automotive plans.
Shares of Mobileye shot up more than 30 per cent in pre-market trading on the New York Stock Exchange after reports of the deal initially serviced.
Mobileye, which works on technology for driverless cars, has been acquired by the tech giant for an equity value of $15.3bn, it has been confirmed, an offer of $63.54 per share and giving it an enterprise value of $14.7bn.
Intel ois splashing the cash to get step up its presence in the world of driverless cars which is expected to be worth as much as $70bn by 2030. Intel's driverless car division will merge and be based in Israel led by Mobileye co-founder, chairman and technology chief professor Amnon Shashua.
“This acquisition is a great step forward for our shareholders, the automotive industry and consumers,” said Intel chief executive Brian Krzanich.
"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.”
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Mobileye has a market cap of more than $10bn and the acquisition is the biggest ever for Israeli tech. Intel in January at the Consumer Electronics show announced a partnership with Mobileye and BMW to bring 40 driverless cars to the roads in tests in the latter half of the year.
"Technology developments are rapid and the needs to offer integrated silicon/hardware/software solutions in AV technology are driving this consolidation in our view. As such, we wouldn't expect this to be the last transaction in this space," said Neil Campling, analyst at Northern Trust Capital Markets.
Shares in Intel were down just over two per cent.
The deal, funded by cash from Intel's balance sheet, is expected to close within nine months. Citi and Rothschild advised Intel while Raymond James & Associates advised Mobileye.