Qualcomm and investment firm SSW agree to buy auto-parts supplier Veoneer for $4.5 billion

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  • Qualcomm said on Monday it would buy Veneer’s stake in a combined $4.5 billion deal.
  • Qualcomm will buy Veoneer’s self-driving subsidiary Arriver and integrate it with its Snapdragon Ride chip platform for cars.
  • SSW Partners, which is working closely with Qualcomm on the deal, will sell the rest of the veneers, including a major auto supplier.

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Qualcomm said on Monday it would buy auto components supplier Veneer’s share in a $4.5 billion transaction, as the chipmaker dives deeper into the car market.

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Qualcomm is working closely with investment firm SSW Partners to complete the transaction. Qualcomm will acquire Veoneer’s Arrival business, which focuses on computer vision, drive policy and driver assistance for a press release. SSW will keep the rest of the Veoneer, trying to sell it piecemeal.

Prior to Monday’s deal, Veneer had agreed to be bought by Magna International in July for $31.25 per share. Qualcomm and SSW are paying $37 per share, beating the previous bid. According to Qualcomm, the purchase price is 86% higher than Veneer’s share price prior to Magna’s announcement.

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Veneer will pay Magna a $110 million termination fee, Magna said in a statement.

The deal underscores the importance of the auto market to Qualcomm and other technology companies as cars include more computer parts such as sensors and processors. Tech vendors including Qualcomm are investing heavily in advanced driver-assistance systems, or ADAS, which allow cars to automatically stay in highway lanes, or brake prematurely to avoid collisions. Intel’s Mobileye also focuses on ADAS systems.

ADAS features are not meant for full autonomous driving, but rely on several similar sensors and algorithms. Advances in ADAS may also apply to self-driving cars.

Qualcomm said it plans to integrate Arriver software into its Snapdragon Ride platform. Arriver was initially created through a partnership between Veoneer and Qualcomm Last year. Qualcomm CEO Cristiano Amon called his company the “natural owner” of Arrival assets, which are mostly software and may eventually run on Qualcomm chips.

Qualcomm executives say the Snapdragon Ride is more open-ended than rival products, allowing auto manufacturers and their suppliers to poke at its code and build their features on top of Qualcomm’s chips and software.

auto makers like GM introducing new software platforms Which will update automatically over a wireless connection and aims to entice customers to pay for services like hands-free driving.

While Qualcomm’s automotive business is a small part of the company, it is growing rapidly. In the most recent quarter, Qualcomm reported $253 million in auto revenue, compared to $3.86 billion from handset technology. The auto business grew by 83 per cent over the same period last year.

The price Qualcomm will pay depends on what happens to the rest of the assets held by SSW. Qualcomm expects the transaction to close next year.

Watch: Qualcomm’s latest smart city technology


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