Technology giant Intel has announced to acquire Israeli autonomous vehicle technology firm Mobileye for an equity value of approximately $15.3 billion and an enterprise value of $14.7 billion. The acquisition aims at coupling Intel’s computing and connectivity expertise and Mobileye’s computer vision expertise to create automated driving solutions from the cloud through the network to the car.
Intel estimates the vehicle systems, data and services market opportunity to be up to $70 billion by 2030. The transaction extends its strategy to invest in data-intensive market opportunities that build on the company’s strengths in computing and connectivity from the cloud, through the network, to the device.
“The acquisition of Mobileye brings together the assets of Intel’s Xeon processors, FPGAs, 3D XPoint memory, and 5G modems with the world leader in automotive computer vision. This acquisition essentially merges the intelligent eyes of the autonomous car with the intelligent brain that actually drives the car,” said Brian Krzanich, CEO, Intel, in an email to his employees.
Last year, Intel partnered with Mobileye along with BMW, to make an autonomous car powered by its processors and the Israeli firm’s software by 2021. The company had previously planned to spend $250 million over the next two years toward the development of autonomous vehicles, but a $15 billion investment is far more significant.
Pursuant to the agreement, a subsidiary of Intel will commence a tender offer to acquire all of the issued and outstanding ordinary shares of Mobileye for $63.54 per share in cash. The combination is expected to accelerate innovation for the automotive industry, positioning Intel as one of the key technology providers in the fast-growing market of fully autonomous vehicles.
Intel expects that by 2020, autonomous vehicles will generate 4,000 GB of data per day, which plays to its strengths in high-performance computing and network connectivity.
“The transaction is unique in the sense that instead of Mobileye being integrated into Intel, Intel’s Automated Driving Group (ADG) will be integrated into Mobileye. Intel’s automotive activity, which is concentrated in the ADG today, has a sizable number of employees,”said Amnon Shashua and Ziv Aviram, Co-founders, Mobileye.
“Combining forces will help accelerate our plans and lower our execution risks. We aim to become the leading team in autonomous driving. We want to make an impact on the world and this acquisition will enable us to accomplish that,” they added.
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 Amnon Shashua. The duo explain that the organization will support their existing production programs and build upon relationships with automotive OEMs, Tier-1 suppliers and semiconductor partners to develop advanced driving assist, highly autonomous and fully autonomous driving programs. Intel Senior Vice President Doug Davis will oversee the combined organization’s engagement across Intel’s business groups and will report to Shashua after the transaction’s closing.
“I can’t wait to begin working with the combined global autonomous driving organization. It is important to note, however, that the next several months will be business as usual for both Intel and Mobileye. We are legally required to operate as separate companies until the transaction closes, which is expected to occur within the next nine months,” added Krzanich.
The transaction is expected to close within the next nine months. It has been approved by the Boards of Directors of both parties and is subject to the receipt of certain regulatory approvals and other closing conditions.
This acquisition is however not Intel’s first stride into the self-driving vehicle market. In April last year, the firm acquired Yogitech, an IoT startup to further its efforts in ADAS, robotics and autonomous machines for market segments. A month later, Intel announced the acquisition of a computer vision firm Itseez, to develop better navigation for self-driving cars.