Qualcomm got here out on prime Monday in its contested bid to purchase Swedish automotive sensor/software program outfit Veoneer — highlighting the San Diego firm’s efforts to diversify past smartphones partially by boosting its know-how footprint with prime automakers.
Qualcomm and SSW Companions of New York, a newly fashioned personal fairness agency, introduced that they reached an settlement to accumulate Veoneer for $37 per share — or $4.5 billion.
That worth exceeds the $31.25 per share, or $3.8 billion, provided earlier by Magna Worldwide, a Canadian auto elements provider.
This summer time, Veoneer’s board of administrators accepted Magna’s provide pending a shareholder vote. However that was earlier than Qualcomm stepped in with a better bid in August.
Magna walked away from the deal on Monday, waiving its four-day window to extend its provide worth. It expects to obtain a break-up price of $110 million from Veoneer.
The complicated transaction should be accredited by regulators. But it surely builds on Qualcomm’s technique to elbow its manner deeper into the automotive know-how market.
Qualcomm already provides chips to carmakers for connectivity, infotainment and the digital cockpit. It had $253 million in automotive gross sales final quarter and a $10 billion future order backlog.
However the firm has set its sights on changing into a prime provider of Superior Driver-Help Methods (ADAS) and autonomous driving applied sciences via its Snapdragon Trip platform.
The ADAS know-how market is forecast to develop from $13 billion final 12 months to $46 billion by 2030 as extra automakers layer in autonomous options of their automobiles.
Veoneer has developed a software program suite, known as Arriver, for ADAS and autonomous driving. In January, Qualcomm started working with Veoneer to combine Arriver’s pc imaginative and prescient and driving coverage applied sciences into Snapdragon Trip.
Arriver’s software program is all that Qualcomm actually desires within the acquisition, stated Stacy Rasgon, an analyst with Bernstein Analysis, in a word to shoppers.
“Automotive types a core piece of Qualcomm’s adjacency technique however consists primarily of telematics/connectivity and digital cockpit/infotainment at this time,” stated Rasgon. “Nonetheless, an acquisition of the Arriver software program will permit them to ship a full-stack, totally built-in silicon/software program resolution just like what Mobileye delivers, giving the corporate what they should make an even bigger play within the ADAS/autonomous car area.”
The transaction is structured in order that SSW Companions will purchase Veoneer after which promote Arriver to Qualcomm.
“Qualcomm is the pure proprietor of Arriver,” stated Chief Govt Cristiano Amon in a press release. “By integrating these property, Qualcomm accelerates its capability to ship a number one and horizontal ADAS resolution as a part of its digital chassis platform.”
After the sale, SSW and Veoneer’s administration will work to search out patrons for the corporate’s remaining companies, which make up the majority of its income. They embody a number of security sensor applied sciences resembling ahead collision warnings, autonomous emergency braking, adaptive cruise management, lane departure warnings and seat belt stress/air bag deployment techniques, amongst different issues.
“This transaction creates superior worth for our shareholders,” stated Jan Carlson, chief govt of Veoneer, in a press release. “It additionally gives engaging alternatives to our Arriver crew at Qualcomm and permits our different companies to search out long-term industrial companions the place they will proceed to develop.”
The deal was introduced Monday earlier than markets opened. Qualcomm’s shares ended buying and selling down 2 p.c at $126.68. Veoneer’s shares gained almost 5 p.c to shut at $36.19.