Qualcomm acquires Veoneer for $4.5 billion, canceling its agreement with Magna

Qualcomm scored the purchase of Swedish automotive tech company Veoneer, nudging out Magna International with a higher bid.

Qualcomm and investment group SSW Partners said Monday they would acquire Veoneer for $37 per share in an all-cash transaction. At closing, SSW said it would sell Veoneer’s Arriver tech -- an advanced driver assistance system stack that includes sensors and software -- to Qualcomm and retain the Swedish company’s other Tier 1 supplier businesses.

Veoneer had previously agreed to sell itself to Magna. It looked like that deal would move forward, until Qualcomm submitted its bid for $800 million, or 18%, more. Magna, which has a market capitalization of $25.3 billion compared to Qualcomm’s $164.8 billion, did not submit a counterbid.

This is not Qualcomm’s first major acquisition this year. The company, which is chiefly known for designing and manufacturing semiconductors and telecommunications equipment, is branching out. In January, Qualcomm agreed to acquire high-performance computing startup Nuvia for $1.4 billion, as it sought markets beyond telecoms. This latest purchase is especially bullish news for ADAS technology, which automakers are starting to roll out in new vehicles as a matter of course.

When Qualcomm submitted its bid to acquire Veoneer -- nearly a month after Magna's -- it was not entirely a surprise. The two companies signed a collaborative agreement at the beginning of this year to develop software and chips for driver-assistance systems.

Veoneer will pay Magna a “breakup fee” of $110 million. The deal is expected to close next year.