Qualcomm mentioned on Monday that it’ll buy a part of auto elements provider Veoneer in a transaction valued at $4.5 billion, because the chipmaker dives deeper into the automobile market.

Qualcomm is teaming up with funding agency SSW Companions to finish the transaction. Qualcomm will purchase Veoneer’s Arriver enterprise, which is concentrated on pc imaginative and prescient, drive coverage and driver help, in keeping with a press launch. SSW will retain the remainder of Veoneer, trying to promote it in items.

Previous to Monday’s deal, Veoneer had agreed in July to be purchased by Magna Worldwide for $31.25 a share. Qualcomm and SSW are paying $37 a share, beating out the prior bid. The acquisition value is 86% larger than Veoneer’s share value earlier than the Magna announcement, in keeping with Qualcomm.

Veoneer can pay Magna a termination charge of $110 million, Magna mentioned in an announcement.

The deal underscores the significance of the auto market to Qualcomm and different expertise corporations, as vehicles embody extra pc elements corresponding to sensors and processors. Tech distributors together with Qualcomm are investing closely in superior driver-assistance techniques, or ADAS. These techniques enable vehicles to routinely keep in a freeway lane or brake forward of time to keep away from collisions. Intel’s Mobileye additionally focuses on ADAS techniques.

ADAS options will not be for totally autonomous driving however depend on most of the similar sensors and algorithms. Advances in ADAS may apply to self-driving vehicles.

Qualcomm mentioned it plans to combine the Arriver software program into its Snapdragon Trip platform. Arriver was created initially by a partnership between Veoneer and Qualcomm final yr. Qualcomm CEO Cristiano Amon known as his firm the “pure proprietor” of the Arriver belongings, that are largely software program and may in the end run on Qualcomm chips.

Qualcomm executives say Snapdragon Trip is extra open than rival merchandise, permitting auto makers and their suppliers to poke at its code and construct their very own options on prime of Qualcomm’s chips and software program.

Auto makers like GM are introducing new software program platforms that can replace routinely over wi-fi connections and intention to entice prospects to pay for providers like hands-free driving.

Whereas Qualcomm’s automotive enterprise is a small a part of the corporate, it is rising rapidly. In the newest quarter, Qualcomm reported $253 million in auto income, in contrast with $3.86 billion from handset expertise. The auto enterprise grew 83% from the identical interval final yr.

The value Qualcomm will in the end pay depends upon what occurs with the remainder of the belongings that SSW will personal. Qualcomm expects the transaction to shut subsequent yr.

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