Qualcomm has come up with an offer to buy automotive technology company Veoneer for $ 4.6 billion. It is noteworthy that last month Magna offered $ 3.8 billion for the same company. Veoneer and Magna say their Boards of Directors unanimously approved the $ 3.8 billion deal last month. Qualcomm, in turn, said Thursday that its proposal does not require shareholder approval.
With the Veoneer acquisition, Qualcomm will strengthen its position in the driving assistance technology market. Autonomous driving and collision avoidance technologies have been the subject of fierce battles as automakers try to outperform their competitors with options that will make their products more attractive. Global car manufacturers and chip makers are increasingly striving to implement advanced safety features in passenger cars.
Analysts at Credit Suisse Securities say Qualcomm's proposal looks logical given its collaboration with Veoneer on driver assistance systems and autonomous driving features. Qualcomm and Veoneer said last year that they plan to develop a driver assistance system that combines Veoneer's software with Qualcomm chips. In January, the companies said they had provided their autonomous driving systems to automakers and received positive feedback from them. What companies have become their clients has not yet been reported. Experts do not expect Magna, the world's fourth-largest car supplier, to offer a higher price, as investors are already wary of the planned acquisition.
Qualcomm shares fell 2.5 percent in New York trading, while Magna shares rose 1.6 percent. Veoneer shares rose 29 percent to $ 40.46 per unit, the highest since 2018. Magna and Veoneer have yet to comment on the situation.
Qualcomm is trying to expand beyond the smartphone market. Last year, the automotive industry accounted for about three percent of chip sales, and this figure is gradually increasing. The CEO of Qualcomm said his company's interest in Veoneer is driven primarily by Arriver's software arm, which creates road-tracking software. Analysts believe Magna will have a hard time competing with Qualcomm.
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