Intel thinks driverless systems are the future, so it's buying one of the leading sensor makers in the segment.
Intel is buying its autonomous technology partner Mobileye for roughly $15.3 billion as a way to improve the tech giant's offerings as an autonomous supplier. The deal still requires regulatory approval, but the companies expect to complete the transaction in the next nine months.
Mobileye specializes in autonomous vehicle technology, including computer vision, machine learning, mapping, and data analysis. In its new role, the firm will become part of Intel’s Automated Driving Group, and they'll look for more opportunities to supply the equipment to automakers. The newly combined division will operate from Israel under the leadership of Mobileye’s Co-Founder Professor Amnon Shashua.
“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.” Intel CEO Brian Krzanich said in the announcement for the merger.
Intel's acquisition of Mobileye is supposed to expand the computing giant's role as an automotive supplier. The firm figures future autonomous vehicles could generate 4,000 gigabytes of data per day, and Intel's computing tech could have a place in that market. There's money to make, too. The company figures that vehicle systems, data, and services could be worth $70 billion by 2030.
Even before this announcement, Mobileye and Intel already had an established relationship. For example, the two firms partnered with BMW in 2016 for an undertaking to introduce a fully autonomous vehicle from the German automaker by 2021. At the 2017 Consumer Electronics Show, they showed a functioning prototype of the system.
Intel and Mobileye merger
Intel to Acquire Mobileye
Combining Technology and Talent to Accelerate the Future of Autonomous Driving
Brings together Mobileye’s leading computer vision expertise with Intel’s highperformance
computing and connectivity expertise to create automated driving solutions
from cloud to car.
Positions Intel to accelerate innovation for automakers and to capture fast-growing
market opportunity, estimated to be up to $70 billion by 2030.
Acquisition expected to be accretive to Intel’s non-GAAP EPS and free cash flow
SANTA CLARA, Calif., and JERUSALEM, March 13, 2017 – Intel Corporation
(NASDAQ: INTC) and Mobileye N.V. (NYSE: MBLY) today announced a definitive
agreement under which Intel would acquire Mobileye, a global leader in the development
of computer vision and machine learning, data analysis, localization and mapping for
advanced driver assistance systems and autonomous driving. Pursuant to the agreement, 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 combination is expected to accelerate innovation for the automotive industry
and position Intel as a leading technology provider in the fast-growing market for highly
and fully autonomous vehicles. Intel estimates the vehicle systems, data and services
market opportunity to be up to $70 billion by 2030. This transaction extends Intel’s
strategy to invest in data-intensive market opportunities that build on the company’s
strengths in computing and connectivity from the cloud, through the network, to the
This acquisition will combine the best-in-class technologies from both companies,
spanning connectivity, computer vision, data center, sensor fusion, high-performance
computing, localization and mapping, machine learning and artificial intelligence.
Together with partners and customers, Intel and Mobileye expect to deliver driving
solutions that will transform the automotive industry. The combined global autonomous
driving organization, which will consist of Mobileye and Intel’s Automated Driving
Group, will be headquartered in Israel and led by Prof. Amnon Shashua, Mobileye’s CoFounder,
Chairman and CTO. The organization will support both companies’ existing
production programs and build upon relationships with automotive OEMs, Tier-1
suppliers and semiconductor partners to develop advanced driving assist, highly
autonomous and fully autonomous driving programs. Intel Senior Vice President Doug
Davis will oversee the combined organization’s engagement across Intel’s business
groups and will report to Prof. Amnon Shashua after the transaction’s closing.
“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 Mr.
Ziv Aviram, Mobileye Co-Founder, President and CEO. “By pooling together our
infrastructure and resources, we can enhance and accelerate our combined know-how in
the areas of mapping, virtual driving, simulators, development tool chains, hardware, data
centers and high-performance computing platforms. Together, we will provide an
attractive value proposition for the automotive industry.”
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. The complexity and computing power of highly
and fully autonomous cars creates large-scale opportunities for high-end Intel® Xeon®
processors and high-performance EyeQ®4 and EyeQ®5 SoCs, high-performance
FPGAs, memory, high-bandwidth connectivity, and computer vision technology.
Transaction Details and Timing
The transaction is expected to be accretive to Intel’s non-GAAP EPS and free
cash flow immediately. Intel intends to fund the acquisition with cash from the balance
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 offer is not subject to any
An Extraordinary General Meeting of Mobileye’s shareholders will be convened
in connection with the offer to adopt, among other things, certain resolutions relating to
For further information regarding the terms and conditions contained in the
definitive agreement, please see Intel’s Current Report on Form 8-K and Mobileye’s
Current Report on Form 6-K, which will be filed with the Securities and Exchange
Commission in connection with this transaction. The offer will be described in more
detail in a tender offer statement on Schedule TO to be filed by Intel and one or more of
its subsidiaries and a solicitation/recommendation statement on Schedule 14D-9 to be
filed by Mobileye.
Citi and Rothschild Inc. serve as financial advisors and Skadden, Arps, Slate,
Meagher & Flom LLP serves as legal counsel to Intel. Raymond James & Associates,
Inc. serves as financial advisor and Morrison & Foerster LLP serves as legal counsel to
For more information, investors are encouraged to visit
http://intelandmobileye.transactionannouncement.com, which will be used by Intel and
Mobileye to disclose information about the transaction and comply with Regulation FD.