The largest acquisition for an Israeli high-tech company came about today, March 13, when US chip giant Intel announced its $15.3 billion purchase of Mobileye collision-avoidance technology supplier.
Intel Corporation and Mobileye today announced a definitive agreement under which Intel would acquire the Israeli global leader in the development of computer vision and machine learning, data analysis, localization and mapping for advanced driver assistance systems and autonomous driving.
“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.
“Israel is becoming a global technology center not just in cyber but in the automotive sector as well.”
— Prime Minister Benjamin Netanyahu
According to a statement by Mobileye, 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, representing an equity value of approximately $15.3 billion and an enterprise value of $14.7 billion.”
The transaction 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 the receipt of certain regulatory approvals and other closing conditions.
The acquisition is the largest the Israeli tech arena has ever seen. To put it into perspective, Israeli high-tech posted $10 billion in 2016 through 93 merger & acquisition deals, 8 buyouts and 3 IPOs.
Prime Minister Benjamin Netanyahu spoke by telephone with Mobileye President and CEO Aviram and congratulated him on the largest deal in the history of Israel, telling him it is a source of Israeli pride.
“The deal dramatically proves that the vision which we are leading is being realized. Israel is becoming a global technology center not just in cyber but in the automotive sector as well,” Netanyahu said.
Aviram told Netanyahu that the center of the company’s operations would remain in Israel, that the company would build a global development center in the country, and that it would be responsible for Intel’s international activity regarding autonomous vehicles.
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.
Intel and Mobileye are already working together with BMW to bring automated cars to market by 2021.
The three companies also announced that they plan to roll out a fleet of approximately 40 autonomous vehicles by the second half of this year.
Mobileye was founded in 1999 by serial entrepreneur Amnon Shashua and Aviram.
And while the founders are expected to make billions from the company’s sale, with employees also garnering big bonuses, Mobileye’s work in Israel is hardly done.
In a letter to the company’s 600 employees, Aviram reportedly wrote: “Amnon (Shashua) and I will continue running Mobileye just as we have done in the past. We will continue to do what we believe is best for our business, our goals and our long-term vision.”
Mobileye is considered the world’s premier developer of vision-based advanced driver assistance systems.
And the founders plan to keep it that way.
“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,” Aviram wrote in a letter to his employees. “The transaction with Intel provides a huge opportunity to leverage each other’s strengths and move faster towards our long-term vision.”