Chipmaking giant, Intel (NASDAQ:INTC), said on Monday that it plans to buy Israel-based Mobileye (NYSE:MBLY), the maker of autonomous driving technology for $15.3 billion (12.53 billion pounds).
This deal will be the biggest technology takeover in Israel’s history and the largest purchase of a company solely focused on the self-driving sector, a sector which is estimated to be worth $70 billion by 2030.
The two companies said that the agreed deal will “accelerate innovation for the automotive industry and position Intel as a leading technology provider in the fast-growing market for highly and fully autonomous vehicles.”
Yossi Vardi, a prominent figure in Israeli high-tech, said the deal would be a big endorsement of the whole sector.
“I’m sure that this … will be a very important impetus to create a whole industry related to autonomous and connected vehicles (in the country),” he said.
Both Mobileye and Intel are currently collaborating with BMW (ETR:BMW) on a project to put 40 self-driving vehicles on the road in the second half of 2017.
Intel hopes that the transaction will close in the next nine months and that it will immediately boost its non-GAAP earnings per share as well as its free cash flow.
“It’s an area where the company (Intel) has had very little presence – the automotive market, and so this is a tremendous opportunity for them to get into a market that has significant growth opportunities,” said Betsy Van Hees, an analyst at Loop Capital Markets.
In its results for last year, Mobileye said revenue more than tripled to $358 million, while pre-tax profit jumped from $79.7 million to $125.4 million.
Technology companies are racing to launch driverless cars, with Nissan (TYO:7201) test driving its driverless vehicle in London last month. Google (NASDAQ:GOOGL) and Uber are also carrying out extensive development of driverless cars.