Intel pushes for driverless cars market with $15bn Mobileye purchase
Intel plans to buy Mobileye for about US$15 billion, its second-biggest acquisition and a bold attempt to dominate technology for self-driving cars.
The US chipmaker will pay $63.54 per share in cash for Mobileye, both companies said yesterday. Mobileye shares closed at $47.27 on Friday in New York.
Intel is trying to accelerate a push into what many chip companies view as the next big opportunity: self-driving cars and the data they generate.
It is hoping to become a dominant player in a sector where companies such as Uber have a head start.
With Mobileye, Intel gains the ability to offer car makers a larger package of all of the components they will need as vehicles become autonomous. Intel estimates the vehicle systems, data and services market to be as much as $70bn by 2030.
“Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for auto makers,” said the Intel chief executive Brian Krzanich.
Self-driving vehicles have potential to disrupt the car industry, and car makers and technology companies are scrambling to stake out a leading market position. Intel’s chips are already in 30 vehicle models currently on the road and are being used in hundreds of autonomous test vehicles, the company said in January. Intel and Mobileye had already teamed up with BMW and plan to introduce fully autonomous cars by 2021. The companies are dispatching a fleet of 40 self-driving 7-Series saloons this year to hone systems for complex urban traffic.
Alphabet’s Google has clocked 2 million self-driving miles on public roads, Tesla Motors has gathered data from 1.3 billion miles of data from Autopilot-equipped vehicles, and the Mercedes-Benz parent Daimler has partnered with Uber.
Google, which separated its self-driving car project into a new unit called Waymo, plans to start a ride-sharing service using semi-autonomous minivans made by Fiat Chrysler Automobiles as soon as the end of 2017. Volkswagen is rolling out Moia, a new division that will focus on ride-sharing and other mobility services. Mercedes already offers cars that can pilot themselves at motorway speeds.
Digital services for automobiles could more than double by 2025 from $900 million, according to Frost & Sullivan’s Sarwant Singh, a senior partner at the global market research company. Mr Singh attributed much of Mobileye’s success to the fact that it was first in its field.
Intel’s offer represents an equity value of about $15.3bn and an enterprise value of $14.7bn, according to the company.
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Updated: March 13, 2017 04:00 AM