US tech giant Intel announced Monday it will buy Israeli tech firm Mobileye, which makes driver-assistance systems, for 15.3 billion dollars, in what could be the largest ever such buyout in Israel's history and a key move for Intel into a budding industry.
Intel and Mobileye announced in a news release that they have entered into a definitive agreement under which Intel will acquire Mobileye. The deal calls for a subsidiary of Intel to tender an offer to acquire all shares of Mobileye for 63.54 dollars each in cash.
The acquisition means California-based Intel, whose processors are in about 80 per cent of the personal computers sold annually, is becoming more important in the rapidly developing self-driving car business and could play a bigger role than it currently does in the development of future vehicles.
Mobileye's cameras figure into cars' "vision" systems, while other technology it develops is used in data analysis, localization and mapping for advanced driver assistance systems and autonomous driving, the news release said.
Intel estimates the vehicle systems, data and services market to grow to up to 70 billion dollars by 2030.
"This transaction extends Intel’s strategy to invest in data-intensive market opportunities that build on the company’sstrengths in computing and connectivity from the cloud, through the network, to the device," the statement read.
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 regulatory approvals and other closing conditions.
German car maker BMW at the same time announced that it was working with Intel and Mobileye on testing 40 autonomous cars in the second half of this year.
Their partnership was first launched in 2016. The trio said they planned "to bring solutions for highly and fully automated driving into series production by 2021."
Mobileye, based in Jerusalem, has a technology that uses sensors to spot threats ahead and inform the driver, helping to mitigate accidents. The firm was launched in 1999.
In January, Intel launched its own brand for a self-driving vehicle along with hardware and software development kits.
There is a growing race among major global companies to launch driverless cars.
Mobileye reported better than expected revenue in the fourth quarter of 2016 and significant quarter-on-quarter revenue and profit growth.
Intel already has an estimated 10,000 employees in Israel. The company is seeking to gain a competitive advantage after lagging in the mobile sector.