Qualcomm tops Magna’s bid with US$4.6 billion offer for Veoneer

BENGALURU (Aug 5): Chipmaker Qualcomm Inc said on Thursday it had offered to buy Swedish auto parts maker Veoneer Inc for US$4.6 billion, an 18.4% premium to a bid in July by Canada’s Magna International Inc that was accepted by Veoneer’s board.

US-listed shares of Veoneer, spun off in 2018 from airbag and seatbelt maker Autoliv, rose 23.4% as the stage was set for a bidding war. Neither Magna or Veoneer made any immediate comment.

Demand has been on the rise for advanced driver assistance systems, known in the industry as ADAS, that add features ranging from collision warning to parking assist. Some systems collect data from cameras and radar to monitor surroundings, interpret the situation, and take action.

Qualcomm, apart from powering mobile phones, has been a chip supplier to carmakers for a decade and last year started its own line of ADAS systems called Snapdragon Ride.

Earlier this year it signed a collaboration deal with Veoneer to develop a software and chip platform for driver-assistance systems.

“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,” said Qualcomm chief executive officer Cristiano Amon.

While fully self-driving vehicles are years away, assisted-driving features, such as adaptive cruise control, are being fitted into new cars by most manufacturers.

“If Qualcomm can successfully sway Veoneer shareholders to accept Qualcomm’s offer… Qualcomm will instantly see its current automotive business expand from its current focus on infotainment, telematics, and instrument cluster to being able to deliver ADAS solutions and more,” Futurum Research analyst Daniel Newman said in an emailed comment.

Qualcomm hopes to grow its automotive chips business by creating open and competitive platforms for automakers along with Veoneer.

Magna has a similar interest in buying Veoneer as it tries to compete with ADAS makers such as Aptiv, Bosch, and Continental to capture a larger share of the booming business.

The Canadian company offered to buy rival Veoneer in July for about US$3.8 billion in cash.

Leave a Reply

Your email address will not be published. Required fields are marked *