Qualcomm launches bidding race for Veoneer
Qualcomm announced on Thursday that it is offering $37 dollars for each Veoneer share. This adds $5.75 to Magna’s original bid. The fabess chipmaker further said that the offer has already been approved by the board of directors and does not require shareholder approval. The move is in line with the company’s strategy, it says. Veoneer’s position is unclear: its management had already approved Magna’s offer and recommended that shareholders accept the deal. However, this has not yet happened, and against the background of the changed situation it is unclear how the matter will turn out.
Qualcomm has been interested in the automotive sector for some time. In January, the company had unveiled a family of Snapdragon processors for use in vehicles, positioning them directly against offerings from top dogs like NXP and Renesas. Qualcomm had also been involved in the competition between the V2X radio technologies DSRC and C-V2X. C-V2X benefits more from the possibilities of cellular networks which happen to be Qualcomm’s Home Turf.
“As the automotive industry continues to transform, it is becoming increasingly important for automakers to have a partner who develops horizontal platforms that drive innovation and enable competition”, courts Qualcomm CEO Cristiano Amon the favor or Veoneer shareholders. “The proposed acquisition will bring together our industry-leading automotive solutions with Veoneer’s assisted driving assets to deliver a competitive and open ADAS platform to automakers and Tier-1 suppliers at scale.”
In the meantime, Veoneer announced that its board of directors has determined that Qualcomm’s proposal would reasonably be expected to result in a “Superior Proposal”, as defined under the terms of Veoneer’s merger agreement with Magna. As a result of this determination, Veoneer may under the terms of the Magna Merger Agreement engage in discussions with Qualcomm. However, for the time being, the Magna Agreement remains in full force and effect, and Veoneer’s board of directors has not withdrawn or modified its recommendation that the Venoeer’s stockholders vote in favor of the approval of the merger.
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