Intel to acquire self-driving car tech company Mobileye for $15B

Intel sign
Intel will acquire Mobileye for $63.54 per share in cash, representing an equity value of about $15.3 billion and an enterprise value of $14.7 billion.

Describing cars of the future as data centers on wheels, Intel announced it is buying autonomous car technology provider Mobileye for $15.3 billion.

Intel believes the move will position it as the leading technology provider in the fast-growing market for autonomous vehicles, estimating the vehicle systems, data and services market opportunity to be up to $70 billion by 2030.

Intel had worked with Mobileye for more than a year on various projects and other companies in the space as well, but continued to come back to Mobileye as being the leader and the right one with which to collaborate. “We came to see that our visions for the future were very much aligned,” said Intel CEO Brian Krzanich during a conference call today.

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Intel has so much confidence in Mobileye that it’s moving its Automated Driving Group to Mobileye’s headquarters in Israel, where the division will be led by Amnon Shashua, Mobileye’s cofounder, chairman and CTO. Intel Senior Vice President Doug Davis will oversee the combined organization’s engagement across Intel’s business groups and will report to Shashua after the transaction’s closing.

For the next nine months or so, the two companies will have to operate as separate, independent companies but once joined together, their synergies will lead to faster, lower cost and quicker time-to-market solutions, Krzanich said.

Shashua said the kind of deep collaboration that needs to occur can only be done by combining the two entities and the core proposition that comes out will be the ability to accelerate and provide autonomous driving sooner and better than anyone else. Mobileye currently is working with 27 car manufacturers, including 10 production programs with Audi, BMW and others.

In a message to employees, Krzanich said many have asked why Intel thinks autonomous cars and vehicles are so important to Intel’s future. “The answer is DATA,” he said. “Our strategy is to make Intel the driving force of the data revolution across every technology and every industry. We are a DATA company. The businesses we focus on, and deliver solutions to, create, use and analyze massive amounts of data.”

As cars progress from assisted driving to fully autonomous, Intel says they are increasingly becoming data centers on wheels. Intel projects that by 2020, autonomous vehicles will generate 4,000 GB of data per day and says the complexity and computing power of highly and fully autonomous cars creates large-scale opportunities for high-end Intel Xeon processors and high-performance EyeQ4 and EyeQ5 SoCs, high-performance FPGAs, memory, high-bandwidth connectivity, and computer vision technology.

The transaction is expected to close within the next nine months. It has been approved by the Intel and Mobileye boards and is subject to regulatory approvals and other closing conditions.

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