Deal: Qualcomm, SSW To Buy Sweden’s Veoneer For $4.5B

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Chipmaking giant Qualcomm has emerged as the winning bidder for Veoneer (NYSE: VNE), a Swedish company that makes hardware and software systems for automated and assisted driving. The company beat out Magna, the Canadian auto parts giant, to emerge with the winning bid.

  • In July, Magna agreed to buy Veoneer for $3.8bn in cash. However, Qualcomm submitted a higher offer of $4.5bn a month after Magna’s agreement, beating the Canadian company’s price considerably. 

Expectedly, Veoneer shareholders have accepted the higher offer and agreed to a sale to Qualcomm. But there’s a catch, Qualcomm won’t buy Veoneer solely but is partnering with a New York-based investment firm, SSW Partners, for the deal.


As the deal is structured, SSW Partners will first buy Veoneer for $4.5bn including debt and then sell part of the company to Qualcomm while it retains another part. The part that’ll be sold to Qualcomm is the Arriver business, Veoneer’s subsidiary working on automated driving systems, while SSW retains Veoneer’s other automotive supply businesses.
  • It appears that Qualcomm’s primary target with Veoneer was its automated driving business rather than the whole company. Fortunately, it’s gotten its exact wish by finding a partner to takeover Veoneer’s other businesses while it retains just the division it wants.
  • How much Qualcomm will pay for the Arriver business wasn’t disclosed.
$4.5bn is an 86% premium to Veoneer’s market cap when Magna submitted the first bid, a high premium that the company’s shareholders expectedly accepted.

The acquisition is expected to be completed next year. 

Correction: We corrected the purchase price to $4.5bn including debt, rather than $4.5bn in cash. The deal includes $4.2bn in cash and the rest in debt assumption.

                                           

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