Tech giant Intel is buying Jerusalem-based driverless systems developer Mobileye for $15.3 billion (£12.5bn).
The deal is by far the biggest ever acquisition of an Israeli company, shattering the previous record exit when Warren Buffett's Berkshire Hathaway paid $6 billion (£4.9bn) for Israeli metal cutting tools developer Iscar.
Intel is paying a huge premium for the company, which had a value of $10.5 billion (£8.5bn) at close of trade on Wall Street on Friday evening.
Intel said it would merge Mobileye with its own automated driving group, and headquarter the combined company in Israel.
Intel CEO Brian Krzanich said: “Mobileye brings the industry’s best automotive-grade computer vision and strong momentum with automakers and suppliers. Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers.”
It took many years for Mobileye, which specialises in collision-avoidance sensors, to emerge as a global leader in the development of driverless cars. Founded in 1999, the company's ideas were far ahead of their time and it struggled to find investors. The biggest shareholders were founders chairman Prof Amnon Shashua and CEO Ziv Aviram and Israeli car importer Dr Shmuel Harlap.
In 2014 and 2015, Mobileye took advantage of growing interest in the development of driverless cars to raise $1.6 billion on the New York Stock Exchange. Prof Shashua and Mr Aviram sold shares for $150 million each but still hold about 7.5 per cent and 6.5 per cent respectively in the company. Dr Harlap kept his 10 per cent stake, insisting that the company "still had a long way to go".
Last year, Mobileye partnered with Intel and BMW on the production of driverless cars. The partnership with Intel has now become something much more.
Mr. Aviram said: "By pooling together our infrastructure and resources, we can enhance and accelerate our combined know-how in the areas of mapping, virtual driving, simulators, development tool chains, hardware, data centers and high-performance computing platforms."
