Qualcomm strikes deal to acquire Veoneer

Qualcomm Inc has partnered with a newly-formed private equity firm on an agreement to acquire Veoneer Inc, ending a lengthy battle between the chipmaker and an incumbent car supplier for control of an automotivetechnology company.

Under the deal announced on Monday, Qualcomm and New Yorkbased SSW Partners will acquire Veoneer for $37 a share, an 18% premium over a bid Magna International Inc made in July.

SSW Partners, founded by former Lazard dealmaker Antonio Weiss, will then sell Veoneer’s autonomousdriving software operation known as Arriver to Qualcomm, and find owners for the rest of its businesses.

Qualcomm’s Cristiano Amon was keen to keep Arriver from falling into Magna’s hands.

The CEO is eager to carve out a bigger role for Qualcomm outside the smartphone market that generates most of the company’s revenue.

Amon has said his tenure will be defined by his success in lessening its reliance on the smartphone market that its processors and modem dominate.

Arriver was born out of a collaboration Qualcomm and Veoneer first announced more than a year ago and crystallised in January.

While Amon no longer has to worry about Magna — the car-parts giant waived a chance to counter and will walk away with a $110 million termination fee — Qualcomm has had problems in the past getting acquisitions approved.

Chinese antitrust clearance scuttled its $44 billion bid to acquire rival chipmaker NXP Semiconductors NV three years ago in what would have been the largest-ever deal in the semiconductor industry.

The transaction is the first deal for SSW Partners, which Weiss started this year with Goldman Sachs Group Inc veteran Eric Schwartz and Quadrangle Group co-founder Joshua Steiner.

Magna first started pursuing Veoneer in September 2019, according to a proxy statement released last month before the Canadian company terminated its merger agreement.

Acquiring the Arriver business within Veoneer should give Qualcomm a firmer footing in the emerging market for driver-assistance technology.

The San Diego-based company is already offering chips that run the information and entertainment features of vehicles and others that connected them to phone networks.

Qualcomm is increasing its capabilities to better take on rivals in the race to provide the heart of technology expected to eventually enable selfdriving vehicles.

Automakers are turning to chipmakers to assemble the various pieces of hardware and software that will power such systems.

Intel Corp and Nvidia Corp have automotive chip divisions that offer customers more than just basic components.

Veoneer and Qualcomm said their boards have signed off on the transaction and that they expect it to close next year.