Qualcomm Inc. has made a $4.6 billion offer to buy auto-technology company Veoneer Inc., moving to outbid Magna International Inc. as the semiconductor company's new chief seeks to expand beyond the core mobile-phone chip business.
Chips have become ever more central to modern cars, with roles in everything from automated driving to the electronics that adjust seat position. More recently, driver-assistance features that use computers to help control speed and steering have found their way into a larger share of auto makers' product lineups.
Qualcomm said Thursday it bid $37 a share for Veoneer. The offer comes two weeks after the Swedish company agreed to be acquired by Magna International, a Canadian auto-parts supplier, in an all-cash deal. Qualcomm is proposing to pay in cash at an 18.4% premium to the Magna offer.
Veoneer, which was spun out of automotive-safety company Autoliv Inc. three years ago, makes sensors such as radar, lidar and camera-based systems that allow computers to take a greater role in driving.
Veoneer, in a statement Thursday, said its board of directors would "evaluate the proposal from Qualcomm consistent with its legal duties and the terms of the Magna merger agreement," adding "the merger agreement remains in place."
The bid is a sign that Qualcomm's new CEO, Cristiano Amon, who took over in June, is looking to move with pace to diversify the company's business beyond mobile-phone networking, where it has helped lead the charge for new superfast 5G networks. The San Diego-based company has built up an automotive chip business in recent years but isn't a leading player in driver assistance.
Veoneer's Arriver unit, which develops autonomous driving software, was what attracted Qualcomm, Mr. Amon said in a letter to Veoneer's board of directors. Qualcomm and Veoneer agreed to collaborate last year, combining Qualcomm's chips with Veoneer's software know-how, resulting in Arriver's formation in January.
The mobility sector has long been of interest to tech companies. Intel Corp. in 2017 agreed to pay roughly $15 billion for Israeli car-camera pioneer Mobileye NV. Apple Inc. has also held talks to get into the car business.
The increasingly critical role chips play in vehicles has become a liability for car makers over the past year during the global shortage of semiconductors. The dearth of available chips has impacted car makers from General Motors Co. to Volkswagen AG. Tesla Inc. also has warned about the potential impact of the chip shortage.
If Qualcomm's bid succeeds, the company plans to keep Arriver and sell Veoneer's remaining assets to others better-suited to own and grow them, Mr. Amon said in his letter.
Qualcomm had $253 million in automotive sales in its latest quarter, up by 83%, though still a fraction of its overall revenue of around $8 billion. Stockholm-based Veoneer had $398 million in sales in the second quarter.
Qualcomm has flirted with having a bigger role in supplying cars before. The company in 2016 offered to pay $44 billion for Dutch chip maker NXP Semiconductors NV, a major supplier of processors for the auto sector. The deal fell through two years later after it failed to win approval in China.
When Mr. Amon was named as incoming CEO early in 2021, he said the company wasn't planning to emphasize splashy acquisitions. "We don't need transformative M&A," he said at the time.
Magna, a Canadian automotive supplier based in Ontario, had said that acquiring Veoneer was part of a plan to boost its market position in the world of driver-assistance features for cars. On Thursday, a spokeswoman for the company declined to comment on the bid from Qualcomm.
Before Magna announced its bid July 22, Veoneer stock was trading below $20 a share. Shares rose more than 23% to $38.49 on Thursday after Qualcomm's proposal. The rise above Qualcomm's offered price of $37 suggests some investors anticipate a bidding war.
