Qualcomm and SSW to buy auto-parts supplier Veoneer for $4.5 billion
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QualcommAs the chipmaker continues to expand its presence in the automotive market, it announced Monday that it would purchase a portion of Veoneer’s auto parts supplier Veoneer for $4.5 billion.
Qualcomm and investment firm SSW Partners will team up to close the deal. Qualcomm will purchase Veoneer’s Arriver business. It focuses on driver assistance, computer vision and drive policy. to a press release. SSW will keep Veoneer’s rest and may sell it as a whole.
Veoneer, which had previously agreed to be purchased by Magna International in July for $31.25 per share, was sold to Magna prior to Monday’s agreement. SSW and Qualcomm are offering $37 per share. This beats the previous bid. Qualcomm claims that the price paid for this share is 86% less than Veoneer’s before Magna announcement.
Veoneer will pay MagnaMagna announced in a statement, that Magna had agreed to pay $110,000,000 as a termination fee.
As cars are equipped with more processors and sensors, the deal shows how important the automotive market is to Qualcomm. Qualcomm and other tech companies are heavily investing in advanced driver-assistance system (ADAS) which allows cars to stay on the highway lane automatically or to brake before they hit other vehicles to avoid collisions. Intel’sMobileye is also a leader in ADAS technology.
ADAS functions are not intended for fully autonomous driving. They rely upon many of the same sensors as other algorithms. Self-driving cars can benefit from advances in ADAS.
Qualcomm stated that it will integrate Arriver’s software in its Snapdragon Ride platform. Veoneer and Qualcomm initially created Arriver. last year. Qualcomm CEO Cristiano Amon called his company the “natural owners” of Arriver assets. They are mostly software but can be run on Qualcomm chip eventually.
Qualcomm executives state that Snapdragon Ride is opener than competitors products. They allow auto manufacturers and their suppliers access to its code, which allows them to create new features on top Qualcomm’s software.
Automakers like GM have a long history. introducing new software platformsThe software will be updated automatically via wireless connection and aims to attract customers to buy services, such as hands-free driver.
The automotive division of Qualcomm is only a part of its overall business, but it is expanding rapidly. Qualcomm’s auto business generated $253 million last quarter, while handset technology earned $3.86 billion. The automotive business saw an 83% increase in revenue compared to the previous year.
What happens to the remaining assets owned by SSW will determine the final price Qualcomm will pay. Qualcomm anticipates that the transaction will close in 2013.
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