Qualcomm and SSW to buy auto-parts supplier Veoneer for $4.5 billion
Qualcomm stated on Monday that it’s going to buy a part of auto parts provider Veoneer in a transaction valued at $4.5 billion, because the chipmaker dives deeper into the automotive market.
Qualcomm is teaming up with funding agency SSW Companions to finish the transaction. Qualcomm will purchase Veoneer’s Arriver enterprise, which is targeted on pc imaginative and prescient, drive coverage and driver help, in accordance to a press release. SSW will retain the remainder of Veoneer, trying to promote it in items.
Previous to Monday’s deal, Veoneer had agreed in July to be purchased by Magna Worldwide for $31.25 a share. Qualcomm and SSW are paying $37 a share, beating out the prior bid. The acquisition worth is 86% increased than Veoneer’s share worth earlier than the Magna announcement, in keeping with Qualcomm.
Veoneer pays Magna a termination charge of $110 million, Magna stated in an announcement.
The deal underscores the significance of the auto market to Qualcomm and different expertise corporations, as vehicles embody extra pc components similar to sensors and processors. Tech distributors together with Qualcomm are investing closely in superior driver-assistance methods, or ADAS. These methods permit vehicles to robotically keep in a freeway lane or brake forward of time to keep away from collisions. Intel’s Mobileye additionally focuses on ADAS methods.
ADAS options should not for absolutely autonomous driving however depend on most of the similar sensors and algorithms. Advances in ADAS also can apply to self-driving vehicles.
Qualcomm stated it plans to combine the Arriver software program into its Snapdragon Experience platform. Arriver was created initially by means of a partnership between Veoneer and Qualcomm last year. Qualcomm CEO Cristiano Amon referred to as his firm the “pure proprietor” of the Arriver property, that are principally software program and may in the end run on Qualcomm chips.
Qualcomm executives say Snapdragon Experience is extra open than rival merchandise, permitting auto makers and their suppliers to poke at its code and construct their very own options on high of Qualcomm’s chips and software program.
Auto makers like GM are introducing new software platforms that can replace robotically over wi-fi connections and purpose to entice clients to pay for companies like hands-free driving.
Whereas Qualcomm’s automotive enterprise is a small a part of the corporate, it is rising shortly. In the latest quarter, Qualcomm reported $253 million in auto income, in contrast with $3.86 billion from handset expertise. The auto enterprise grew 83% from the identical interval final yr.
The worth Qualcomm will in the end pay relies on what occurs with the remainder of the property that SSW will personal. Qualcomm expects the transaction to shut subsequent yr.