Intel to sell $1.5 billion of Mobileye stake via secondary share offering

Mobileye announced that its parent company US chipmaker Intel is planning to divest part of its holding in the Jerusalem-headquartered autonomous driving subsidiary.

Intel is offering to sell 35 million shares of Class A common stock, worth about $1.5 billion, in Mobileye through a secondary public offering, according to a regulatory filing with the US Securities and Exchange Commission. In addition, the underwriters of the offering have been granted with a 30-day option to buy another 5.25 million shares of the Israeli automated driving technology maker.

The sale comes after Mobileye debuted on Wall Street at the end of October, raising some $860 million in a long-awaited initial public offering (IPO) that valued the Israeli-founded Intel unit at over $21 billion. Since the IPO, Mobileye shares have more than doubled giving the maker of self-driving technologies a market cap of almost $34 billion.

The US chip giant bought Mobileye in 2017 for over $15 billion, in a deal that remains the largest exit for an Israeli tech company to date.

Upon completion of the share offering, Intel will retain a controlling stake of 88.7% in Mobileye, or 88.1% if the underwriters exercise their option to buy additional shares, according to the SEC filing.

Intel is raising capital as the US tech giant has set itself ambitious goals to build a vibrant foundry ecosystem and democratize AI across its software and semiconductor offerings. That’s as Intel sees demand for AI capabilities in the cloud and across workloads and applications continuing to grow fast, while competitors such as US computer chip designer Nvidia have been ahead of the game in the market for chips used in AI systems.

In recent years, Mobileye — led by co-founder Amnon Shashua — has become a world leader in the self-driving systems space with one of the largest fleet of autonomous vehicles in testing across the globe, including in Munich, Detroit, New York City, Tokyo and Paris. Among its clients are BMW, Nissan and Volkswagen.

To date, more than 140 million vehicles worldwide have been built with Mobileye technology.

Mobileye was founded in 1999 with the aim to help lower vehicle injuries and fatalities. The company received an investment of $130 million from Goldman Sachs in 2007 and listed shares on the New York Stock Exchange in 2014.