Intel Corp. (Nasdaq: INTC) has confirmed that it is acquiring Israeli vehicle safety and automation systems company Mobileye N.V. (NYSE: MBLY). Intel announced that it will commence a tender offer to acquire all of the issued and outstanding ordinary shares of Mobileye for $63.54 per share in cash - an equity value of about $15.3 billion and an enterprise value of $14.7 billion. The deal is the biggest ever exit in the history of Israeli industry.
Intel said that the acquisition of the Jerusalem based company will position it 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.
Intel said that the 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 said they expect to deliver driving solutions that will transform the automotive industry.
Intel added that 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 SVP 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.
Intel CEO Brian Krzanich said, “This acquisition is a great step forward for our shareholders, the automotive industry and consumers. 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.”
Mobileye cofounder, president and CEO Ziv Aviram said, “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. 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.”
Mobileye was founded by Shashua and Aviram in 1999. The company initially developed camera-based technology for warning about road hazards and preventing collisions, which formed the basis for systems for driverless cars.
Mobileye was floated on Wall Street in 2014 and currently has a market cap of some $10.5 billion. Its share price has shot up about 30% since first reports of the deal with Intel broke.
In the past year, Mobileye has forged ties with several automotive and technology giants, among them BMW and Intel, with the aim of achieving series production of automated vehicles by 2021.
"In two decades it will be illegal to drive"
In September 2016, Mobileye was named by "Globes" Israeli company of the decade. In an interview that Shashua and Aviram gave to "Globes" at the time, Aviram said, "In two decades, it will be illegal to drive, because we drivers are responsible for 93% of the accidents, and road fatalities are a plague - 1.5 million fatalities a year in road accidents and 50 million more injured. I recently calculated the economic damage at $600 billion. It's a plague of the modern world, and we have somehow come to accept it with equanimity. There's a cure that will save 1.5 million lives and 50 million injured, so the autonomous car is a wave that has begun, and cannot be stopped. It won't be stopped."
Aviram added that the automated car also has far-reaching significance beyond reducing road accidents, saying, "First of all, it will cut down on the number of cars on the road, because we currently spend only 4% of our time in a car. It's the most wasteful sector around. Think of it as buying a smartphone and using it only 4% of the time. It's illogical. The number of cars will drop, some say by half, some say less, because people will no longer own a car. You operate an app. Say I want to go from point A to point B. A car will stop next to me, and collect other people on the way. If you want to go for a weekend outing with the children, you order a minivan, and if you want to go to work some morning, you order a sports car."
In the same interview, Shashua said, "You can say for sure that two things will happen by 2021: there will be premium cars operated by an automatic driver on permitted high-speed roads, for example Highway 6 in Israel (Cross-Israel Highway). This car will travel safely without any hands. You can sleep, read a book, and the system will give you some time to reassume control of the car. The system can wake you up, and if you don't take control, it will make the car stop safely on the side of the road. That should happen between 2019 and 2021.
"The other thing that will happen in 2021 is that several players will launch technology for an autonomous car in a virtually delineated urban space designed to carry passengers. These players will include BMW, and Ford. Apple Computers has also announced it, and it is likely that Google will come up with such technology by then. It will happen technologically. It will take another few years before the company and the regulators allow such a vehicle to really travel without a driver. For a few years, there will be a driver behind the steering wheel solely for the purpose of collecting statistics in order to prove that these vehicles are really safe.
"Something else that will happen in about 2023-2024 is the continuation of automatic detailed maps. An autonomous car will have the technological capability to travel from point A to point B without a driver, and here, too, a driver will have to be behind the wheel at the beginning in order to prove that it's safe. Several years after that, if everything works, you'll be able to see an automated car traveling from point A to point B without a driver in both an urban space and an interurban space."
Published by Globes [online], Israel business news - www.globes-online.com - on March 13, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017