Lidar firms Ouster and Velodyne mentioned Monday they plan to merge.

The 2 firms signed a merger settlement Friday. Present Velodyne and Ouster shareholders would every personal about 50 % of the mixed firm beneath phrases of the “merger of equals” settlement, which is anticipated to shut within the first half of 2023.

Ouster CEO Angus Pacala is anticipated to carry the identical place within the new firm. Ouster reported revenues of $11.2 million on the finish of the third quarter, a rise of 44 % yr over yr.

“Collectively, we’ll purpose to ship the efficiency clients demand whereas attaining value factors low sufficient to advertise move adoption,” Pacala mentioned in a press release.

The businesses mentioned they anticipate to save lots of $75 million per yr in “operational synergies” throughout engineering, manufacturing and administration as soon as the merger is full. As of the tip of the third quarter, they’d a mixed money steadiness of $355 million, they mentioned.

Velodyne and Ouster compete in precision sensors that allow self-driving automobiles to see the world round them. Each firms have been hit onerous as timetables for large-scale autonomous automobile deployment have stretched out.

Ouster shares have misplaced 77 % of their worth since Jan. 1 and Velodyne was down 80 % this yr earlier than Monday’s merger announcement.

“There must be financially sturdy firms on this house,” Pacala advised Reuters on Monday. “Obligatory consolidation is occurring.”

The announcement comes two days earlier than Luminar, a serious competitor within the lidar realm, expects to launch its know-how with Volvo as normal gear in its new EX90.