The U.S. chipmaker, Qualcomm, will have to seek approval from the European Union’s antitrust regulator for its planned takeover of the Israeli auto-chip maker Autotalks. This announcement came on Friday, despite the deal being below the European Union’s turnover threshold.
The European Commission, the EU competition watchdog, stated that the deal would be important for the original equipment manufacturers and those needing access to vehicle-to-everything (V2X) semiconductors. Fifteen EU countries asked the commission to examine the deal, including France, Ireland, Italy, the Netherlands, Poland, Spain, and Sweden.
Qualcomm must now secure EU antitrust approval before it can close the deal. The Commission stated, “The transaction would combine two of the main suppliers of V2X semiconductors in the EEA (European Economic Area). The V2X technology is key to improving road safety, traffic management and reducing CO2 emissions as well as for the deployment of autonomous vehicles.”
Qualcomm, who announced the planned takeover in May to expand its automotive-related business, could not be reached for comment. Autotalks is a dedicated chip maker in the V2X communications technology sector, and their chips are used in manned and driverless vehicles with the goal of improving road safety.
The importance of the deal is clear to the EC, as they stated, “It is therefore important to ensure that customers such as original equipment manufacturers or infrastructure managers retain access to V2X technology at competitive prices and conditions.”
This emphasizes the need to have access to V2X technology in order to improve traffic safety, traffic management, and reduce carbon dioxide emissions. Autonomous vehicles are Department of Transportation is currently investing billions in researching systems to ensure the safety of self-driving vehicles.
The Commission also said that it was clear the transaction had to be reviewed “although the [qualoommer/Autotalks] transaction does not reach the notification thresholds set out in the [EU Merger Regulation],” further emphasizing the importance of the deal.
This move by the EC will certainly have a ripple effect in the V2X semiconductor market, and there will be a close eye on how Qualcomm’s auto-chip maker acquisition will shape up. It is a great reminder of the importance of maintaining access to this technology at competitive prices and conditions for original equipment manufacturers and infrastructure managers.
Source: Seeking Alpha