Bidding War Looms for Swedish ADAS After $4.6b Offer

Qualcomm Incorporated has submitted an offer to acquire the Swedish Advanced Driver-Assistance Systems (ADAS) company, Veoneer for $37 per share, totalling a $4.6 billion offer in an all-cash transaction. It ups a previous offer of $3.8 billion by Magna International Inc., potentially sparking a billion-dollar bidding war.

On July 23, 2021, Magna International Inc. and Veoneer, Inc. announced they had entered into a definitive merger agreement under which Magna would acquire Veoneer. Pursuant to the agreement, Magna would acquire all of the issued and outstanding shares of Veoneer for $31.25 per share in cash, representing a total value of $3.8 billion, and an enterprise value of $3.3 billion.

Qualcomm is one of the world’s leading wireless technology innovators and the driving force behind the development, launch, and expansion of 5G. It applies the benefits of mobile to new industries, including automotive, the internet of things, and computing. A large portion of its business is committed to the manufacturing and application of semiconductors in computer vision products – this is where Veoneer comes in.

Veoneer designs, develops and manufactures software, hardware and systems for occupant protection, advanced driving assistance systems, collaborative and automated driving. Made up of around 7,500 people, it develops vision systems, radar, lidar, thermal sensing, electronic controls, and human-machine interfaces to prevent traffic incidents from happening and mitigate the effect when accidents are unavoidable.

Qualcomm says the proposed acquisition is “consistent with Qualcomm’s growth and diversification strategy… reinforces the company’s commitment to bring advanced technologies to the automotive industry and represents a natural extension of Qualcomm’s digital chassis solutions”. The company continues to see traction in automotive, with a revenue-design win pipeline of approximately $10 billion.

“As the automotive industry continues to transform, it is becoming increasingly important for automakers to have a partner who develops horizontal platforms that drive innovation and enable competition. The proposed acquisition will bring together our industry-leading automotive solutions with Veoneer’s assisted driving assets to deliver a competitive and open ADAS platform to automakers and Tier 1 suppliers at scale”, said Cristiano Amon, president and CEO of Qualcomm Incorporated.

Qualcomm will fund the transaction with existing cash resources, and therefore, its offer is not subject to any financing contingency or condition. The offer has been unanimously approved by Qualcomm’s Board of Directors and does not require Qualcomm stockholder approval.

Qualcomm is prepared to immediately commence a focused diligence process, which it anticipates being able to complete in short order. Qualcomm stated that it does not believe there are material regulatory clearance concerns in respect to its offer but will agree to the same regulatory provisions as the Magna agreement and “expects to provide even greater regulatory-related closing protection following our diligence”. Qualcomm believes that its offer delivers superior value and deal certainty to Veoneer stockholders.

You can find more information about Qualcomm and its offering of $4.6b for the Swedish Advanced Driver-assistance systems company, Veoneer on its website.

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