Intel buying Mobileye for $15.3 billion in continued bid for self-driving car tech

Intel is buying Mobileye for about $15.3 billion as the race for self-driving car technology heats up.

The Santa Clara-based chip giant said Monday that it will pay $63.54 a share in cash for the Jerusalem-based maker of camera systems for autonomous vehicles. That’s a 34 percent premium on the closing price of Mobileye shares Friday.

Intel CEO Brian Krzanich said in a message to employees that “this acquisition essentially merges the intelligent eyes of the autonomous car with the intelligent brain that actually drives the car.

“I truly believe we are better together,” Krzanich said.

“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,” Mobileye CEO Ziv Averam said in a letter to employees. He also said he and Chief Technology Officer Amnon Shashua will be “running Mobileye just as we have done in the past.”

The two companies are no strangers to each other’s technology. Last summer, they announced a partnership with BMW to create an open platform for self-driving cars.

Also last year, Mobileye said it would not be renewing its contract with Tesla after a fatal crash in a Model S soured their relationship. Amid safety concerns about Tesla’s Autopilot technology, the two companies engaged in public finger-pointing. At the time, Mobileye insisted that it had more going for it than its relationship with Tesla.

Intel had already invested in self-driving technology this year. In January, the company announced it bought a 15 percent stake in Here, a provider of mapping data and services that’s co-owned by German automakers Audi, BMW and Daimler.

Other Silicon Valley tech companies that are in the self-driving vehicle race include Google parent Alphabet, Tesla and Uber.

Intel sees its role in the space as data-driven.

“Our strategy is to make Intel the driving force of the data revolution across every technology and every industry,” Krazanich said in his letter to employees.

Intel shares are up slightly in pre-market trading, rising 0.25 percent to $35.91. Mobileye shares were up more than 30 percent to $61.94. The acquisition is expected to close by the end of the year.

 

Photo: From left, Intel CEO Brian Krzanich, Mobileye co-founder and CTO Amnon Shashua and Klaus Fröhlich of BMW Group discuss a BMW prototype at the Consumer Electronics Show in Las Vegas in January. The BMW Group, Intel and Mobileye announced on Jan. 4, 2017 that they would test a fleet of about 40 autonomous vehicles on the roads by the second half of 2017. (Walden Kirsch/Intel)

 

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