Intel snaps up Israeli Mobileye for $14.9 billion
In what is the most expensive acquisition of an Israeli high-tech company, the US chip giant Intel purchases Israeli company Mobileye for around $15 billion, paving its entry into the autonomous driving technology market; Netanyahu: ‘This deal proves that the vision we are leading is coming true.’
US chip giant Intel has bought Israeli driverless technology firm Mobileye for a massive $14.9 billion, in what is considered to be the largest ever acquisition of an Israeli high-tech company.
Intel CEO Brian Krzanich officially stated that the deal, which is also noted for being the world's biggest purchase of a company solely focused on the autonomous driving sector.
Mobileye's stock surged 33 percent to $62.90 a share in premarket US trading on the reports.
The two companies are already collaborating with German automaker BMW on a project to put a fleet of around 40 self-driving test vehicles on the road in the second half of this year.
For a decade, Mobileye has relied on Franco-Italian chipmaker STMicroelectronics to produce chips which the Israeli company sells to many of the world’s top automakers for its current, third-generation of driver-assistance systems.
However, while it was working with BMW, Mobileye also teamed up with Intel for its fifth-generation of chips that aim to be used in fully autonomous vehicles and are scheduled to be delivered around 2021.
After the deal was officially announced, Prime Minister Benjamin Netanyahu called Mobileye CEO Ziv Aviram and congratulated him on the deal, praising the transaction it a national pride.
"This deal proves that the vision we are leading is coming true. Israel is becoming an international technological powerhouse. Not only in regards to cyber, but in regards to vehicles as well," said Netanyahu.
"Congratulations to Mobileye! Israeli genius, Israeli pride," he tweeted.
Aviram assured the PM that the Mobileye headquarters, along with its hundreds of jobs, will remain in Israel, and that the company also plans to establish an international development center in the country and to take responsibility for the entirety of Intel's autonomous car project.
Among the congratulators was also Minister of Labor and Social Affairs Haim Katz. Katz said that during the next cabinet meeting, he would request to transfer some of the funds due from the State in favor of increasing benefits for the elderly and the disabled.
According to Katz, "this is an historical opportunity that may not recur—an opportunity that could dramatically lower the percentage of the poor in Israel."
Founded in 1999, Mobileye made its mission to reduce vehicle injuries and fatalities. After receiving an investment of $130 million from Goldman Sachs in 2007, it listed on the New York Stock Exchange in 2014. It has a market value of $10.6 billion.
Last October, Qualcomm announced a $47 billion deal to acquire NXP, the largest automotive chip supplier, putting pressure on other chipmakers seeking to make inroads into the market for autonomous driving components, including Intel, Mobileye and NVIDIA.
The Qualcomm-NXP deal, which will create the industry's largest portfolio of sensors, networking and other elements vital to autonomous driving, is expected to close later in 2017, subject to regulatory and shareholder approvals.
Mobileye, which employs around 600 people, had adjusted net income of $173.3 million in 2016.