“I want to say something a little unusual: It’s not the money. What we want to is to change the world. And the tie-up with Intel ensures this,” Amnon Shashua, founder and chairman of Mobileye, said at a press conference Tuesday with Intel CEO Brian Krzanich and Prime Minister Benjamin Netanyahu.
They came to celebrate a day after Intel agreed to pay $15.3 billion for Mobileye, the maker of self-driving car technology in the biggest high-tech merger and acquisitions deal in Israeli history. It was Intel’s second-biggest acquisition ever, Krzanich said.
Asked why he consented to selling Mobileye when it was riding the crest of the autonomous-car wave, with a market cap of $10 billion and alliances with some of the world’s top auto makers, Shashua said he saw it as the only way for the company to keep growing.
“Since we went public [in 2014], we’ve expanded into many areas – mapping different driving systems, and it all takes time,” he explained. “Under Intel there’s the infrastructure and the resources that we don’t have. If we want to change the world and to be a key player, we have to think in terms of a complete industry, not just a product – and that’s the reason for the merger.”
Netanyahu opened the press conference by calling the sale a red letter day for the Israeli economy and in particular for Jerusalem, where Mobileye has its headquarters.
“Israel has quickly become an advanced technology power. That’s not by chance. It’s a vision we have been advancing, which is a combination of a free economy and advanced technology. Of course, without the brains we have we wouldn’t have gotten far, but without a free market and with an insufferable bureaucracy, we wouldn’t have gotten anywhere,” Netanyahu said.
Mobileye sale eased way for tax cuts
Hand in hand with the Mobileye-Intel announcement, Netanyahu and Finance Minister Moshe Kahlon had said on Monday they also planned another round of reductions in the personal and corporate income tax and value-added tax.
Sources said that one of the factors in moving ahead with the plan earlier than they had first envisioned was the $1 billion tax windfall the government expects to earn from the Mobileye sale. Many economists and Bank of Israel Governor Karnit Flug have urged caution.
Yesterday Netanyahu and Economy and Industry Minster Eli Cohen defended the move, saying it boosted economic growth and helped lure multinational companies to Israel.
“Lowering taxes helps economic growth and growth gives us [tax money] for the budget. Every time I lower tax rates, I get more growth,” the prime minister said. “I’m glad that giant companies are coming to Israel and I think that if Israel’s macroeconomic policies were not as good, I’m not sure we would see them operating here.”
The prime minister said Israel was giving the same priority to automotive technology that it was giving to cyber-security, where it has invested considerable money and resources, including sponsoring a cyber-security tech center in Be’er Sheba.
The celebrations of Israeli high-tech, however, have been shadowed by the hard line that the Transportation Ministry is taking against ride-sharing services, like Uber. Last week TheMarker reported that officials were weighing starting criminal proceedings against the American company for violating regulations of driving for profit with its Uber Night service.
In response, Netanyahu said he would discuss the matter with Transportation Minister Yisrael Katz. “I will do everything I can to solve regulatory issues so that Israel leads the world in the autonomous-driving revolution,” he said.
In a meeting with Mobileye CEO Ziv Aviram and Intel Israel chief Yaniv Garty, Katz said all cars imported to Israel starting next January would have to have systems that alert drivers they are too close to another vehicle or have veered out of their lane.
Katz said he would sign the order, which is expected to give a boost to Mobileye, which In addition to its self-driving technology also makes anti-collision systems and works with all of Israel’s car importers. Even today, 54 percent of all imported cars feature the technology because of tax breaks offered on it, Transportation Ministry director general Keren Turner told a news conference.
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