Swedish automotive technology company Veoneer will hold formal talks with Qualcomm about an acquisition bid from the chip-maker, Veoneer announced Sunday (Aug. 8).
A recent offer from Qualcomm is likely to constitute a “superior bid” under the terms of a previous acquisition bid Veoneer’s board had approved, pending shareholder approval, with Magna International Inc., the release stated.
Despite engaging Qualcomm, Veoneer “has not withdrawn or modified its recommendation that the stockholders of Veoneer vote in favor of the approval of the merger (with Magna),” the announcement states.
Veoneer stated in its announcement that terminating the deal with Magna would require payment of a $110 million termination fee.
Qualcomm’s offer could “reasonably be expected to result in a ‘Superior Proposal’, as defined under the terms of Veoneer’s merger agreement with Magna,” the board said in a statement.
“As a result of the Board’s determination, Veoneer may under the terms of the Merger Agreement engage in discussions with Qualcomm based on the Qualcomm Proposal and Veoneer intends to do so.”
Reuters reported that Qualcomm’s $4.6 billion bid for Veoneer would represent an 18.4 percent premium over Magna’s.
Magna declined a request to comment on the Qualcomm offer, Reuters reported.
See also: Qualcomm Enables Car Companies To Get Updates, Data From The Cloud
The bidding for Veoneer comes on the heels of two major announcements in the automotive technology sector.
On July 14, Toyota added mobility services to its fleet of self-driving cars. On July 15, driverless car startup Aurora, financed by Uber and Amazon, announced it would go public through a SPAC merger.
Read more: Toyota, Amazon, Uber Make Big Moves In Connected Car Space
By some forecasts, 95 percent of cars will be connected to the internet by 2030 — up from about 50 percent today.
The market for automobile-related commerce alone is huge. A 2018 Pymnts study found that morning commuters spend about $19 billion a year on coffee and commuters ordering ahead of picking up food on the way to work spent $47 billion.
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