Largest high-tech deal in history: Intel purchases Mobileye

The deal is valued at $14.7 billion, which is significantly more than what Groupe PSA paid for General Motors’ Opel and Vauxhall brands.

One of Intel’s subsidiaries will purchase all issued and outstanding common shares of Mobileye for $63.54 apiece in cash.

Though Goldman Sachs and Morgan Stanley took Mobileye public in 2014, they were not listed as advisers on its sale Monday.

In addition to the stake acquisition, the two companies also agreed to collaborate on research and development in the areas of highly scalable proof-of-concept architecture for real time updates of high definition (HD) maps for automated driving. Intel Senior Vice President Doug Davis will also report to Shashua and oversee the combined organisation’s engagement across Intel’s business groups.

Interestingly, both Intel and Mobileye were on collaboration with BMW on a project involving about 40 self-driving test vehicles that should be put on the road in the current year’s second half.

Intel chief executive Brian Krzanich said the company will pair Mobileye’s computer vision technology with Intel’s own microprocessors, memory chips and forthcoming wireless modems. “Together with partners and customers, Intel and Mobileye expect to deliver driving solutions that will transform the automotive industry”. While Intel is recognized for hardware chips and Mobileye for collision detection software, their merger assures to develop the most complete portfolio of technologies required for driverless vehicles, including cameras, sensor chips, in-car networking, roadway mapping, machine learning and cloud software, As well as the data-centers needed to manage all the data involved.

It seems Intel is gearing up to venture into the autonomous auto market big time.

Mobileye’s prominence in the self-driving cars space has grown and grown in recent years, as its computer vision technology developed alongside an industry deep in research and development.

Ziv Aviram, President and CEO of Mobileye, demonstrates the driverless vehicle to Israeli Prime Minister Benjamin Netanyahu (3R) and former U.S. president Barack Obama (2R) during an exhibition of technological innovation at the Israel Museum, as Amnon Shashua (R), Mobileye’s co-founder and chief technology officer, looks on, in Jerusalem, March 21, 2013.

With PC sales slowing and Intel seeming powerless in making up the ground lost to mobile chip rivals like Qualcomm, the computing company is having to diversify its interests. The $39 billion deal is expected to close later this year.

Intel and Mobileye said the deal provides Intel with closer relationships to suppliers and vehicle makers.