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U.S. chip giant Intel has agreed to buy Israeli driverless technology firm Mobileye for $15.3 billion, the largest ever acquisition of an Israeli high-tech company.
The $63.54 per share cash deal is the world’s biggest purchase of a company solely focused on the autonomous driving sector.
For a decade, Mobileye has relied on Franco-Italian chipmaker STMicroelectronics to produce chips which the Israeli company sells to many of the world’s top automakers for its current, third-generation of driver-assistance systems.
Mobileye accounts for 70 percent of the global market for advanced driver-assistance and anti-collision systems.
Intel said it expected the transaction to close within the next nine months and to immediately boost its non-GAAP earnings per share, as well as its free cash flow.
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Why Intel is paying $15 billion for Mobileye
That’s why Intel — known for its chips, data centers and computing capabilities — just bought self-driving tech supplier Mobileye for $15 billion.
Mobileye made $121 million in operating profit last year, making Intel’s $15 billion purchase price 124 times its profit.
Lastly, by absorbing Intel’s automotive team, Mobileye can continue to work directly with its many partners.
For Mobileye, Intel’s appeal was threefold.
Intel and Mobileye together would be able to marry the data-crunching needs with sensor tech.