The $3.8 billion sale of Swedish automotive tech company Veoneer to Magna International hit a roadblock Thursday after chipmaker Qualcomm submitted a bid for the company for $800 million more.
Qualcomm’s $4.6 billion bid, which comes in at $37 per share, has already received approval from the company’s board and would not need a stockholder vote, the chipmaker said in a statement. Veoneer and Magna said in July that both companies’ boards had approved the acquisition.
Veoneer is a developer of advanced driver assistance systems, decision-making vehicle hardware and software that can perform a limited set of actions under certain conditions, like changing lanes on a highway or emergency braking. While ADAS is a far cry from “self-driving cars,” it has become a popular — and attainable — set of features that are appearing in a greater share of new vehicles on offer today.
The burgeoning bidding war between Magna and Qualcomm is bullish on the future of ADAS technology, as each company seeks to stay competitive with Tier-1 ADAS suppliers Continental and Bosch. Qualcomm’s market capitalization currently sits at $164.8 billion, while Magna’s is $25.3 billion. It’s unclear whether Magna will submit a counter-bid.
The market has responded to the new bid, with the stock price of Veoneer rising nearly $7 per share, from $31.22 to $38.20 between Wednesday and Thursday. Prior to the announcement of the sale to Magna on July 23, Veoneer stock sat at $19.93 per share.
Veoneer was spun off from automotive safety system maker Autoliv in 2018. The company formed a joint venture with Volvo Cars, dubbed Zenuity, that was focused on advanced driver assistance systems. That venture was later split last July.
The ADAS developer also has a pre-existing relationship with Qualcomm. The two companies signed an agreement in January to collaborate on an ADAS platform.