The deal is expected to add to Magna's sensor and full systems capabilities, including radar, camera and driver monitoring, and add 2,200 engineers for systems, software and sensor development.

Canadian supplier Magna International Inc. said on Tuesday it agreed to buy Veoneer Active Safety from investment firm SSW Partners for $1.53 billion in cash to bolster its portfolio of self-driving technology.

The deal, expected to close by mid-2023, gives Magna access to Veoneer's suite of camera and radar systems, as well as its driver monitoring technology and domain controllers. Magna will gain about 2,200 engineers as a result of the deal, most of which work in key systems, software and sensor development areas.

The move is expected to provide a major boost in revenue for Magna's advanced driver assistance systems business, which generated about $550 million in revenue in 2021. Veoneer Active Safety sales are projected to be about $1.1 billion in 2022 and increase to about $1.9 billion in 2024.

Combined with Veoneer's assets, Magna expects its ADAS business to grow to about $3 billion by 2024.

"We expect our combined product lines to have enhanced experience and scale," Magna CEO Swamy Kotagiri said on a call with analysts. "We should be among the leaders in camera and radar technology, which would address two of the largest total addressable markets in ADAS."
The deal comes about 14 months after Magna was outbid for the entirety of Sweden-based Veoneer by U.S. tech giant Qualcomm Inc., which paid $4.5 billion to purchase Veoneer's Arriver software business — about 18 percent more than Magna offered.

Qualcomm reached the deal to acquire the Arriver business in October 2021, with the remainder of Veoneer's business being held by New York-based SSW Partners, which was tasked with finding a home for the rest of the business.
That Magna reemerged as a buyer for Veoneer's active safety business is not a surprise. There was immediate speculation last year that Magna would eventually bid on the Veoneer business lines that Qualcomm didn't want. The deal does not include Veoneer's restraint control business, however.

Magna saw "no deterioration" in Veoneer's ADAS business in the last year, so it remained an attractive acquisition target, Kotagiri said.

"There was no material change in what we had seen a year ago versus now," he said.
Carmakers and suppliers have been fine-tuning their approach to self-driving and driver-assistance systems after struggling to deliver meaningful progress on deploying robotaxi on public roads. Volkswagen Group and Ford Motor Co. last month pulled their support from self-driving firm Argo, after pouring billions into the startup. Other carmakers like Tesla Inc. have also fallen short on self-driving goals.

Still, Magna and other companies are banking on Level 2 and Level 2-plus technology to become standard on vehicles in the coming years as the industry looks to improve safety and driver comfort. SAE International defines Level 2 systems as those with features that provide steering, braking and acceleration support to the driver, who remains in control of the vehicle.

Magna said its acquisition of Veoneer Active Safety will provide for "enhanced experience and scale" throughout the vehicle, including front and rear corner radars, front cameras, driver monitoring systems and in-cabin monitoring systems that will be crucial for the adoption of L2 technology.

"We should be among the leaders in camera and radar technology, which would address two of the largest total addressable markets in ADAS," Kotagiri said.

The deal gives Magna access to Veoneer Active Safety's team of 2,200 engineers, of which 1,800 work in systems, software and sensor development, as well as four manufacturing sites and 15 engineering centers worldwide. Veoneer Active Safety employs 3,700 people overall.

Having made more than 40 million radar sensors in the last decade, Veoneer's experience in manufacturing and engineering will be "significant" for Magna as it looks to boost its ADAS business, Kotagiri said.

"Just bringing the two teams together with that manufacturing expertise is going to be very advantageous," he said.

As of 10 a.m. EST, Magna shares were down 1.9 percent to $55.99 in early trading.

Magna ranks No. 4 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $36.2 billion in 2021.

Reuters, Bloomberg and Philip Nussel of Automotive News contributed to this report.