Intel buys Mobileye for USD 15.3 bln

Intel on Monday announced plans to increase its role in the self-driving auto market, acquiring Israel-based Mobileye for $15.4 billion.

Today’s deal announcement may have been triggered by QualComm’s decision last October to acquire NXP for $47 billion.

“We want to bring all these technologies together in one package”, said Krzanich.

Although shares of Mobileye initially shot up roughly 30% Monday (March 13) morning, the market didn’t seem particularly enthused by Intel’s plans, with its shares later dropping about 2% ($0.65).

The deal places Intel at the heart of a rapidly-growing industry. Mobileye’s shares shot up about 28 percent to $60.62.

Intel Corporation (NASDAQ:INTC) confirmed Israel media report that it is acquiring Mobileye NV (NYSE:MBLY) for $63.54 A Share. Amnon Shashua and Ziv Aviram, working as CTO and CEO of the company, respectively. All current contracts now under Mobileye for automotive OEMs will be retained under this new company. At the time, Mobileye insisted that it had more going for it than its relationship with Tesla.

Mobileye and Intel already are collaborating with BMW on a project that will see the production of 40 self-driving test cars. Nvidia has also been selling its graphics processing units (GPUs) and software to leading autonomous vehicle companies like Audi, Tesla, Mercedes-Benz, and Volvo. This has increased the pressure on other chipmakers seeking to make inroads into the market for autonomous driving components, including Intel, Mobileye and rival NVIDIA.

Another analyst suggested that Intel’s Mobileye purchase is playing catch-up.

The chip maker disclosed that it plans to fund the acquisition from its cash position in the balance sheet.

“They also said there is more to the deal than the “$15B acquisition” figure.

“Intel are so far behind in this space the only way they could catch up was via an acquisition”, Neil Campling, head of technology research at Northern Trust Securities, said to Bloomberg. In announcing the deal, the company said that its processors will dovetail nicely with Mobileye’s vision chips and 360-degree sensing technology in these “data centers on wheels”. Intel Senior Vice President Doug Davis will oversee the combined organization’s engagement across Intel’s business groups. “That’s especially true given Intel missed the mobile wave and is attempting to make up for it through investments in virtual reality and self-driving technology”.

The acquisition will help Intel ramp up its autonomous vehicle solutions, an industry it expects to bale $70bn by 2030.