Qualcomm has formally proposed to acquire ADAS technology provider Veoneer for more than $4 billion

Bloomberg reported on Monday (13th) citing sources that Qualcomm has formally proposed to acquire Swedish advanced driver assistance system (ADAS) technology company Veoneer for more than US$4 billion, gaining an advantage in the bidding by exceeding Magna's offer. Veoneer has issued a press release confirming receipt of Qualcomm's proposal.

Sources said Qualcomm offered a price of $37 per share. After the news came out, Veoneer's stock price rose 2.18% to $35.6 per share.

Qualcomm is deeply interested in Veoneer's Arriver self-driving division, which is mainly responsible for the development of technologies such as ADAS, and plans to sell non-Arriver assets to private equity firms or other automakers after the acquisition.

As automakers seek to raise vehicle prices and gain a technological advantage, areas such as vehicle collision avoidance systems and self-driving technology have become a fiercely competitive battlefield, with global automotive parts suppliers and chip makers scrambling to gain a foothold in the market for advanced automotive safety features.

Magna proposed to acquire Veoneer in July at $31.25 per share, or about $3.8 billion in total. The boards of directors of both parties had agreed to the acquisition, but Qualcomm intercepted it in August and said it was willing to acquire it at $37 per share, or $4.6 billion in total. If Qualcomm and Veoneer reach an acquisition agreement, Magna has the right to make another bid.

However, Bloomberg data shows that Magna, a major auto parts manufacturer, may find it difficult to compete with Qualcomm. Qualcomm's market value is $162 billion and its cash equivalents are worth nearly $13 billion. In comparison, Magna's market value is about $24 billion and its cash equivalents are worth $3.4 billion.

Credit Suisse automotive analyst Dan Levy said Magna is not expected to bid further because the company's investors are cautious about the acquisition. On the other hand, Qualcomm is trying to expand its business beyond mobile phones. Automotive chips accounted for about 3% of the company's chip sales last year, and growth has been slow in recent quarters.