Canadian company, Magna International, which is one of the biggest automotive manufacturers in the world has acquired Veoneer, a company known for the development of ADAS technology for $3.8 billion. The transaction is expected to close later this year.
Veoneer creates semi-autonomous driving features like hands-free and crash avoidance technology. In recent years, with the improvement in ADAS technology, many automakers have leaned on the expertise of third parties like Veoneer to give their cars a technological edge in light of the development of fully self-driving vehicles from companies like Waymo.
"Veoneer's complementary technology offerings, customer base, and geographic footprint make it an excellent fit with our ADAS business, and the acquisition strengthens our global engineering and software development talent base," said Magna CEO Swamy Kotagiri.
Magna is one of the world's largest contract manufacturers
"We expect the combined entity to be an industry leader in active safety solutions, to enhance its position in complete ADAS systems, and to be well-positioned for the transition towards higher levels of autonomy. The acquisition is also consistent with our go-forward strategy to accelerate investment in high-growth areas," he added.
Traditional manufacturers like GM and Ford are introducing hands-free driving software to their vehicles. GM owns self-driving startup Cruise, while Ford has a partnership with Argo AI of full self-driving and is also betting big on ADAS with its Blue Cruise service for the F-150 pickup. Veoneer spawned out of auto safety supplier AutoLive in 2018.
"This is a compelling transaction for all stakeholders. It will deliver significant and immediate value to Veoneer stockholders through an attractive premium to our trading price, and provide new opportunities for our employees to join one of the most capable suppliers in the mobility space. In addition, combining forces with Magna will allow the combined business to elevate its status as a full-systems ADAS supplier, which should benefit our customers, supplier partners and ultimately consumers," said Jan Carlson, Veoneer's Chairman, President & CEO.
