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Qualcomm made a $4.6 billion acquisition offer to Veoneer, a company that makes a technology used by automakers to build partly autonomous driving features into enhanced cars. The offer is part of Qualcomm’s bid to expand its market, to cover more than just smartphone chips.

The company is also looking to expand and get into data centre infrastructure and carrier markets.

The offer is 18% higher than the competing bid ($3.8 billion) made by Magna International in July. Qualcomm’s CEO, Cristiano Amon, wrote a public letter to the Veoneer board of directors.

The letter

In it, Amon stated that his company’s offer represents a ‘compelling opportunity for Veoneer and its shareholders’ on both a stand-alone basis and compared to what’s being offered by Magna.

Amon also argued that Qualcomm’s acquisition presents less risk for Veoneer in some aspects. Amon cited Magna’s presence in the same market segments as Veoneer. If the two companies were to merge, they would draw regulator scrutiny, concerned with the competition reduction in those markets.

Amon continued to say Qualcomm does not believe there are regulatory problems its transaction could face, as opposed to the potential for issues the Magna deal may open.

Qualcomm’s bid to be in automotive chips

Qualcomm is a leading supplier of smartphone processors and modem chips used in handsets to connect to networks. In recent years, the company has moved into other parts of the semiconductor industry to boost revenue.

As part of this strategy, the company is looking to the automotive chip market. Acquiring Veoneer could accelerate this.

Veoneer is based in Stockholm and is one of the most significant players in its market, making things like driver assistance systems that can brake automatically, help maintain safe distances in traffic, help drivers park, and other things.