Swedish automotive tech company Veoneer was about to complete its sale to Magna International for $3.8B until Qualcomm came in and submitted a bid for $4.6B, increasing the previous bid by $800 million.
In a statement by Qualcomm, the American chipmaker said that the$4.6 billion bid comes at $37 per share that has been pre-approved by the companies board and would hence not require a stockholder vote. While this is part of recent development, both Veoneer and Magna had announced that their respective boards had approved the acquisition.
Veoneer is known for developing advanced driver assistance systems, decision-making hardware for vehicles and custom software that can make perform certain actions under given conditions like changing lanes or emergency braking. ADAS has become a popular feature among self-driving cars, because of its popularity and attainability, it has started appearing in more and more vehicles.
This war between Qualcomm and Magna can be seen as essential for the future of ADAS technology as both of the companies seek to stay in the race with Tier-1 ADAS suppliers such as Continental and Bosch. It is unclear whether Magna will submit a new bid over Qualcomm as currently, Magna’s market capitalization maxes out at $25.3 Billion while Qualcomm sits at $164.8 Billion.
After Qualcomm submitted their new bid, the spiked interest resulted in a $7 increase in Veoneer’s stock price changing it to $38.20 from $31.22 per share between Wednesday and Thursday. Before Veoneer announced this acquisition by Magna, their stock price sat at $19.93 per share.
In 2018, Veoneer was spun off from the automotive safety system maker Autoliv. The company then formed a joint venture with Volvo cars which was named Zenuity. Zenuity focus on advanced driver assistance systems. The joint venture was then split last July.
Cristiano Amon, CEO of Qualcomm Incorporated said “Our interest in Veoneer is driven by Arriver, and while we plan to explore a divestment of the non-Arriver assets to parties who are better positioned to grow these strong and stable businesses, neither the separation nor sale of the non-Arriver assets is a condition of our proposal."
While Qualcomm is not a foreign entity for Veoneer as the two have previously collaborated on an ADAS platform, this acquisition would make Veoneer the property of the American chipmaker.
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