By Michele Maatouk
Date: Monday 13 Mar 2017
(ShareCast News) - Shares in Israeli technology group Mobileye rocketed on Monday following confirmation that it has agreed to be bought by chip giant Intel in a $15.3bn deal.
Under the terms of the deal, Intel will commence a tender offer of $63.54 for each of Mobileye's shares outstanding, representing a 34.4% premium to the closing price on Friday.
Intel said the transaction, which is expected to close in the next nine months, should be accretive to its adjusted earnings per share and free cash flow immediately. It plans to fund the deal with cash from its balance sheet.
Chief executive Brian Krzanich said: "This acquisition is a great step forward for our shareholders, the automotive industry and consumers.
"Intel provides critical foundational technologies for autonomous driving including plotting the car's path and making real-time driving decisions. Mobileye brings the industry's best automotive-grade computer vision and strong momentum with automakers and suppliers. Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers."
Mobileye, which started trading on the New York Stock Exchange in August 2014, is a supplier of collision-avoidance car sensor systems.
The company operates its machine vision R&D headquarters from Jerusalem, Israel and has offices in the United States, China, Germany and Japan, and distributors in over 48 countries.
In November last year, Intel said its investment arm, Intel Capital, would spend $250m over the next two years to develop autonomous vehicles.
At 1148 GMT, Mobile eye shares were up 31% to $62.02 in pre-market trade, while Intel shares were down 1% to $35.54.
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