Intel’s Acquisition of Mobileye Positions Intel to Accelerate Driver Assistance Systems and Autonomous Driving Vehicles

Intel Corporation and Mobileye N.V. announced a definitive agreement under which Intel would acquire Mobileye, a developer of computer vision and machine learning, data analysis, localization and mapping for driver assistance systems and autonomous driving.  Pursuant to the agreement, a subsidiary of Intel will commence a tender offer to acquire all of the issued and outstanding ordinary shares of Mobileye for $63.54 per share in cash, representing an equity value of approximately $15.3 billion and an enterprise value of $14.7 billion.

Intel estimates the vehicle systems, data, and services market opportunity to be up to $70 billion by 2030.  This transaction extends Intel’s strategy to invest in data-intensive market opportunities that build on the company’s capabilities in computing and connectivity from the cloud, through the network, to the device.

This acquisition will combine 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 expect to deliver advanced assisted and autonomous driving solutions to the automotive industry.  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 Co-Founder, 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. 

As cars progress from assisted driving to fully autonomous, they are increasingly becoming data centers on wheels.  Intel expects that by 2020, autonomous vehicles will generate 4,000 GB of data per day, which plays to Intel’s capabilities in high-performance computing and network connectivity.  The complexity and computing power of highly and fully autonomous cars creates large-scale opportunities for high-end Intel Xeon processors and high-performance EyeQ4 and EyeQ5 SoCs, high-performance FPGAs, memory, high-bandwidth connectivity, and computer vision technology.

Transaction Details and Timing
The transaction is expected to be accretive to Intel’s non-GAAP EPS and free cash flow immediately.  Intel intends to fund the acquisition with cash from the balance sheet.

The transaction is expected to close within the next nine months.  It has been approved by the Intel and Mobileye Boards of Directors and is subject to the receipt of certain regulatory approvals and other closing conditions.  The offer is not subject to any financing conditions.

An Extraordinary General Meeting of Mobileye’s shareholders will be convened in connection with the offer to adopt, among other things, certain resolutions relating to the transaction.

Keywords: Autonomous Driving, Computer Vision, High-Performance Computing, Machine Learning, Data Analysis, Localization and Mapping, Artificial Intelligence, ARC Advisory Group.