On Monday, Intel Corp announced that it reached a deal to acquire Mobileye N.V. at the price of $15.3 billion. This is the latest investment the technology giant has made in the future of the self-driving vehicle.
This deal gives Mobileye a value per share of $63.54, which is a premium of 34% over its Friday closing price. Shares of Mobileye were much higher by 32% in trading before the opening bell on Monday, while Intel stock was down by 1.5%.
Mobileye is a maker of camera systems that are chip-based that power driving features that are semi-automated and are already being used for some vehicles today. It is working to put the same technology in as the focal point for self-driving vehicles for the future.
Intel and Mobileye already are linked. Intel, BMW and Mobileye are in a partnership that is expected to put close to 40 vehicles that are self-driving on the road for a test mode.
This deal for Mobileye, which is based in Jerusalem, is a win for the tech scene in Israel, as it represents one of the biggest deals for an Israeli company to date.
Tech companies and auto makers including the likes of Uber Technologies, Tesla Inc. and Alphabet Inc. are in a race to develop the best autonomous technology.
Last year General Motors invested $1 billion to purchase Cruise Automation as a way to expedite its program of self-driving. Uber acquired Otto the self-driving truck maker at a price of $680 last August. Google parent, Alphabet, sued Uber recently for allegedly stealing its trade secrets that were related to the deal.
Intel, in January, said it was acquiring a stake of 15% in Here International, a digital mapmaker, joining with the other core shareholders Daimler AG, Audi, and BMW to develop the navigation technology used in self-driving vehicles.
Mobileye and Intel said this deal will provide Intel with a better relationship with car makers and suppliers. Last week, South Korea electronics giant Samsung completed its deal of $8 billion to acquire Harman International Industries in a move of its own into the automotive arena.
Mobileye executives, via a memo to all employees, said that the existing effort by Intel in automated driving will be used to integrate into the company, based in Jerusalem and operated by its existing executives.
The deal will add to the adjusted earnings per share for Intel and is expected to be completed during the upcoming nine months.