Intel’s $15 billion plans to acquire Jerusalem’s Mobileye not only demonstrate the company’s belief in Israeli innovation, but also position the country to become the global leader in autonomous driving, according to the chip giant’s CEO, Brian Krzanich.
“We think of ourselves as an Israeli company as much as a US company,” Krzanich said at a Jerusalem press conference on Tuesday evening at the Prime Minister’s Office.
The day before, Intel declared its intentions to acquire Israel’s autonomous driving company Mobileye for about $15 billion – the biggest deal to hit the country’s hi-tech industry. Alongside Prime Minister Benjamin Netanyahu, Economy Minister Eli Cohen and Mobileye’s leaders Ziv Aviram and Amnon Shashua, Krzanich stressed how the deal will enable Israel to accelerate and steer the international autonomous vehicle industry.
“This is one of the largest acquisitions in Israel, but it’s also the second-largest acquisition effort that Intel has done in history of the company,” he said.
The firms announced a definitive agreement on Monday for Intel to acquire Mobileye, a global leader in the development of computer vision and machine learning for advanced driver assistance systems and autonomous driving. According to the agreement, an Intel subsidiary will launch a tender to acquire all of the outstanding ordinary shares of Mobileye for $63.54 per share in cash, amounting to an equity value of about $15.3b. and an enterprise value of $14.7b.
While Intel is acquiring Mobileye, the companies have decided to base their future autonomous driving operations at Mobileye’s Jerusalem headquarters, with the company’s cofounder, chairman and CTO Amnon Shashua leading operations there.
“I am really excited about this collaboration,” Krzanich said. “I just want to say that it will be centered here in Jerusalem, led by Amnon. He will lead Intel’s overall autonomous vehicle efforts, across the whole company, not just here in Israel. We will be folding in operations in the US underneath the operations here.”
The forthcoming acquisition, which is expected to be concluded in about nine months, marks Intel’s regard for the innovation that comes out of Israel, where the company has had operations for 40 years, according to Krzanich.
The deal also speaks to Intel’s understanding that autonomous vehicles are going to make the world a safer environment, with lower energy usage and improved city life, he said.
With Intel’s autonomous driving operations about be headquartered in Israel, under Mobileye’s Shashua, the country will have an opportunity “to lead how these autonomous vehicles go out on their own, interact with cities, interact with government agencies and really set the standards for how this gets implemented into the world,” Krzanich added.
Netanyahu and Cohen praised the deal, both stressing how important the acquisition will be for the Israeli economy and for the country’s image as a hi-tech hub worldwide.
“This opens up avenues for the Israeli economy, for growth that we see, for all our collective and individual purposes,” Netanyahu said.
“The world sees in Israel a center of innovation that is unique. I think outside the United States, this is the other place where you see this cross-fertilization of great minds that are producing new conceptual products that are indeed changing the world, changing the world for the better.”
As the distinction between hi-tech and low-tech continues to disappear across every sector, the future, the prime minister stressed, “belongs to those nations who innovate.”
“The significance here for Israel and for the world is not merely that the Israeli economy is going to grow more robust and that there are going to be more jobs in Israel,” Netanyahu said. “The significance is that if you want to see the industries of the future, which I think are the industries of the present, come to Israel, and I’m very glad Intel has already done that.”
All in all, the transaction is expected to bring about $1b. in tax revenue and add about 3,000 jobs for Israelis, according to Cohen.
“But what is important for us is not only the tax that the government will receive, but that Mobileye will be a leading company worldwide,” he said.
Prior to the press conference Tuesday evening, Intel and Mobileye managers also held a meeting with Transportation Minister Israel Katz that. During the meeting, Katz announced his intentions to sign an order requiring all new vehicles imported to Israel on or after January 1, 2018 to have at least two driver assistance safety systems – for lane departure control and frontal distance monitoring.
“Intel has invested more than $15b. in the company’s vision and believes in its capabilities in the field of smart vehicles and alert systems that will save lives,” Katz said.
“The State of Israel will soon be the leader in futuristic transportation and the use of smart technologies and a center of knowledge for saving lives and preventing accidents on roads.”
At the Prime Minister’s Office on Tuesday evening, Shashua – who will be leading Intel’s autonomous driving division – expressed his confidence that Intel and Mobileye’s decision to come together will enable the innovators to truly make an impact on the sector.
“It’s not about money,” Shashua said. “It is about extending our possibilities.”
Mobileye had already begun to spread its wings into areas that demanded a number of new resources, such as mapping, systems building and intelligence – tools that Intel had at its fingertips, he explained.
“If we want to change the world, be the key player in autonomous driving, we have to think about it as an industry,” Shashua said.
“Once we think about it as an industry, it makes a lot of sense to join forces.”