Qualcomm and SSW Partners, a New York-based investment partnership, today announced they had reached a definitive agreement to acquire Veoneer for US$37 per share in an all-cash transaction, valuing the takeover target at $4.5bn.
Veoneer has terminated its prior acquisition agreement with Magna International and cancelled its 19 October, 2021 special meeting that was previously scheduled to approve that agreement.
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. SSW Partners will then lead the process of selling those off. 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) product. 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 the existing business plan and to identify strong, long-term strategic owners 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 prioritise 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 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,” said Cristiano Amon, president and CEO of Qualcomm. “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.”
“This transaction creates superior value for our shareholders,” said Jan Carlson, chairman, president and CEO of Veoneer. “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.”
“We are excited to partner with Qualcomm to acquire Veoneer,” said Antonio Weiss and Josh Steiner of SSW Partners. “While Qualcomm focuses on the Arriver business, we will focus on finding strong, long-term strategic homes for the rest of Veoneer’s businesses.”
Transaction details
The cash purchase price of $37 is 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 regulatory approvals. It is expected to close in 2022.
The announcement follows the Veoneer board’s determination, with the assistance of its financial and legal advisors, that a formal acquisition offer Veoneer received from Qualcomm and SSW Partners on 1 October, 2021 constitutes a “superior proposal” under the terms of Veoneer’s merger agreement with Magna dated 22 July, 2021.
Magna has waived its right to submit a revised proposal to Veoneer.