Chipmaker Qualcomm and SSW Partners, a recently formed New York private equity firm, announced they have agreed to acquire Swedish automotive technology group Veoneer for $4.5 billion or $37 per share in cash.
SSW Partners will acquire Veoneer and then sell Veoneer’s autonomous-driving software operation known as Arriver to Qualcomm — and then find owners for the rest of its businesses.
Veoneer’s advanced driver assistance systems (ADAS) had made it a takeover target for both Qualcomm and Canada’s Magna International.
“Veoneer has terminated its prior acquisition agreement with Magna International Inc. and canceled its October 19, 2021, special meeting that was previously scheduled to approve that agreement,” said Veoneer.
Magna said Veoneer will pay a termination fee of $110 million to Magna.
The purchase price of $37 per share represents an 18% premium to Veoneer’s prior agreement with Magna, and an 86% premium to the unaffected share price prior to the announcement of the Magna agreement.
The transaction has been approved by the boards of directors of Qualcomm and Veoneer and is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the United States, certain European foreign direct investment approvals, approval by Veoneer stockholders and other customary conditions.
The transaction is expected to close in 2022.
Qualcomm this year signed a collaboration deal with Veoneer to develop a software and chip platform for Arriver.
SSW’s partners are listed on its website as former Goldman Sachs Group veteran Eric Schwartz, Quadrangle Group co-founder Joshua Steiner, and ex-Lazard executive Antonio Weiss.
“At closing, SSW Partners will acquire all of the outstanding capital stock of Veoneer, shortly after which it will sell the Arriver business to Qualcomm and retain Veoneer’s Tier-1 supplier businesses,” said Veoneer.
“SSW Partners will lead the process of finding strong, long-term strategic partners.
“This transaction structure facilitates the long-term success of all Veoneer’s businesses.
“Having already demonstrated a successful partnership with Arriver, Qualcomm believes that the Arriver business will thrive at Qualcomm.
“Upon close of the transactions, Qualcomm will incorporate Arriver’s Computer Vision, Drive Policy and Driver Assistance assets into its leading Snapdragon Ride Advanced Driver Assistance Systems (ADAS) solution.
“This will augment Qualcomm’s ability to deliver an open and competitive ADAS platform for automakers and Tier-1s at scale.
“SSW Partners will work with Veoneer’s management to ensure the pursuit of Veoneer’s existing business plan and to identify strong, long-term strategic partners for the Restraint Control Systems (RCS) and Active Safety businesses.
“The principals of SSW Partners have substantial investing, operating and transaction experience internationally, as well as a track record of success in collaborating with management teams in multiple geographies and industries.
“They are experienced investors and advisors in both Europe and the automotive sector and will prioritize the smooth continuation of business activities for the customers and employees of the RCS and Active Safety businesses.
“SSW Partners’ investment in Veoneer will represent its first capital commitment as a partnership since its founding at the beginning of the year.”
Qualcomm CEO Cristiano Amon said: “Qualcomm is the natural owner of Arriver.
“By integrating these assets, Qualcomm accelerates its ability to deliver a leading and horizontal ADAS solution as part of its digital chassis platform.
“We believe that this transaction and structure benefits both Qualcomm’s and Veoneer’s shareholders, positions all of Veoneer’s businesses for success and provides a compelling opportunity to customers and employees.”
Veoneer CEO Jan Carlson said: “This transaction creates superior value for our shareholders.
“It also provides attractive opportunities to our Arriver team at Qualcomm and allows our other businesses to find long-term industrial partners where they can continue to develop …
“Our board and management team remain focused on delivering on our objectives, driving continuous improvements across the organization and launching new technologies and programs for our customers.
“Despite significant industry-wide challenges, our team has done an outstanding job positioning Veoneer for success, building on our leading ecosystem of partners, cutting-edge technology and a strong order book.”
Antonio Weiss and Josh Steiner of SSW Partners said: “We are excited to partner with Qualcomm to acquire Veoneer.
“While Qualcomm focuses on the Arriver business, we will focus on finding strong, long-term strategic homes for the rest of Veoneer’s businesses – we are committed to ensuring that Veoneer’s employees prosper, the businesses continue to innovate and grow and customers continue to have uninterrupted access to the outstanding service and quality for which Veoneer is known.
“We have high regard for Veoneer’s management team and look forward to partnering with them to ensure a successful outcome for all stakeholders.”
Centerview Partners LLC and Evercore Group L.L.C. acted as financial advisors to Qualcomm and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal counsel.
Davis Polk & Wardwell acted as legal counsel to SSW Partners. Morgan Stanley and Rothschild & Co. acted as financial advisors to Veoneer, and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel.