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Qualcomm interests itself in buying automotive company-Veoneer, offers $4.6B

Veoneer

Source: Automotive News

Qualcomm, as we all know, is the world’s leading chip-maker. It designs, manufactures, and markets processor chips and other wireless technology products including telecommunication services and more. Most of us use Qualcomm’s chip every day through our Android smartphones with Qualcomm Snapdragon processors. However, you must have noticed that when we talk about Qualcomm, it only revolved around telecommunications products and that is because it is its niche and according to recent reports, the chip company intends to expand and put some of its eggs in the automotive industry.

Yes, you read that right! Qualcomm is reportedly showing keen interest in acquiring Veoneer, a Stockholm-based automotive company that produces control units, sensors, software and deals with advanced technology for Advance Driving Assistance Systems a.k.a. ADAS.

The chipmaker has reportedly offered to buy the company for USD 4.6 billion which is higher than the offer made by rival Magna International Inc. It is a bidding war out there between Qualcomm and Magna International for the automotive technology company, Veoneer Inc.

As mentioned in a report by Bloomberg Quint, Qualcomm is offering to acquire Veoneer at USD 37 apiece that makes it an 18 percent premium as opposed to Magna International’s USD 31.25 per share bid. For Magna International, the total deal for buying out the technology company would suffice at USD 3.8 billion. Thus, at this point, Qualcomm’s USD 4.6 billion offer at USD 37 per share makes more sense for Veoneer, according to experts.

Qualcomm, a company that has already established itself in the technology hardware industry will gain more from acquiring Veoneer as it will get a firmer foothold in the emerging driver-assistance technology. Autonomous cars and hands-free driving assistance technology are the future of autonomy in the automotive industry and Qualcomm has everything to gain from the emerging market, consider if it is successful in acquiring Veoneer with its Advance Driving Assistance Systems.

Automotive products accounted for approximately 3 percent of chip sales last year and the industry analysts are speculating this number to increase significantly year on year. As mentioned in a report by Bloomberg and noted in Transport Topics, Qualcomm Chief Executive Officer, Christiano Amon says that the company’s interest in Veoneer was majorly driven by its software unit- ‘Arriver’, which enables a car to perceive and make driving decisions autonomously without human input.

Furthermore, Veoneer confirmed that it received Qualcomm’s offer to acquire the company and its board is currently evaluating the proposal. The automotive technology company also confirms to be complying with all legal obligations in the terms of its agreement with Magna International and has agreed to pay a $110 million break-up fee to Magna, if the company receives and agrees to a better proposal.

 

 

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