At a time when the global semiconductor shortage has adversely affected several of the leading automakers – plummeting their sales and even forcing them to shut down their production – leading chip manufacturer Qualcomm has partnered with New York-based private equity firm SSW Partners to acquire Swedish automotive tech company Veoneer for $4.5 billion.
The companies have reached a definitive agreement to acquire Veoneer for $37 per share in an all-cash transaction, Qualcomm informed in a press release. According to the agreement, SSW Partners will acquire all of the outstanding capital stock of Veoneer, retain Veoneer’s Tier-1 supplier business, and sell its advanced driver assistance system stack Arriver to Qualcomm. SSW will also work with Veoneer’s management to identify strong, long-term strategic partners for the Restraint Control Systems (RCS) and Active Safety businesses.
The chip manufacturer believes that Arriver will be utilized properly in Qualcomm, and it will incorporate the company’s Computer Vision, Drive Policy, and Driver Assistance assets into its leading Snapdragon Ride Advanced Driver Assistance Systems (ADAS) solution to bolster its ability to roll out an open and competitive ADAS platform for automakers and Tier-1s at scale.
Qualcomm’s price is significantly higher than what was offered by Magna International earlier. It was Magna that had given the first offer at $31.25 per share, but it was outshone by Qualcomm’s bid of $800 million, a premium of 18% over Magna’s offer made in July, and Magna did not submit a counterbid.
However, Magna will not be returning empty-handed as Veoneer will pay Magna a “consolation prize” of $10 million.
“We believe that this transaction and structure benefits both Qualcomm’s and Veoneer’s shareholders, position all of Veoneer’s businesses for success and provides a compelling opportunity to customers and employees,” said Cristiano Amon, president, and CEO of Qualcomm Incorporated. The San Diego-based Qualcomm is looking to move beyond producing chips for smartphones and extend into driver-assistance technology and the incorporation of Arriver will further its goal.
“This transaction creates superior value for our shareholders,” said Jan Carlson, Chairman, President, and CEO of Veoneer. “It also provides attractive opportunities to our Arriver team at Qualcomm and allows our other businesses to find long-term industrial partners where they can continue to develop.”