Magna announced it would acquire Veoneer, saying the latter’s complementary products and capability would “strengthen and broaden” its advanced driver assistance systems (ADAS) product line and industry position.
The deal would add “significant engineering and software expertise, including in sensor perception and drive policy software.”
Under a definitive merger agreement, Magna will acquire all Veoneer shares for US$31.25 cash each, or $3.8bn.
The merger would expand Magna’s ADAS business with major customers and open access to new customers and regions, especially Asia.
Magna would operate Veoneer’s Arriver sensor perception and drive policy software platform as an independent business unit, as Veoneer does currently. Magna is also acquiring Veoneer’s “leading global position in restraint control systems”.
“Veoneer’s complementary technology offer, 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.
“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.”
Veoneer would be combined with Magna’s existing ADAS business and integrated into its electronics operating unit.
Jan Carlson, Veoneer’s chairman, president and CEO said: “This is a compelling transaction for all our 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 mobility suppliers. Combining forces with Magna will allow the merged business to elevate its status as a full-systems ADAS supplier which should benefit our customers, suppliers and, ultimately, consumers.”
The merger would create a major ADAS supplier which booked combined sales of $1.2bn in 2020 and able to supply camera, radar, LiDAR and domain controller plus perception and drive policy software.
“The complementary nature of the two businesses is expected to result in greater ADAS content per vehicle for Magna driven by the opportunity to offer more complete and integrated ADAS systems, inclusive of software,” the supplier said in a statement.
Veoneer was founded in 2018 as a spin-off from electronic safety systems supplier Autoliv.
This story was originally published on Just Auto, part of the GlobalData network.