Intel to Buy Mobileye for $15.3 Billion -- 2nd Update

Intel Corp. on Monday said it struck a deal to buy Mobileye N.V. for about $15.3 billion, the latest investment by a technology company in the future of self-driving cars.

The deal values Mobileye at $63.54 a share, a 34% premium to its closing price Friday. Mobileye shares rose 32% to $62.40 in premarket trading, while Intel shares fell 1.5%.

Mobileye makes chip-based camera systems that power semi-automated driving features that are already being used in cars today and is working to put that technology in the center of self-driving cars of the future.

The two companies already have ties. Intel, Mobileye and BMW AG, have a partnership to put about 40 self-driving cars on the road in test mode.

The deal for Jerusalem-based Mobileye is also a win for Israel's tech scene, representing one of the largest Israeli deals to date.

Auto makers and tech companies including Alphabet Inc., Uber Technologies Inc. and Tesla Inc. are racing to develop autonomous technology.

General Motors Co. last year spent $1 billion to acquire Cruise Automation to expedite its self-driving program. Uber bought self-driving truck maker Otto for $680 million in August. Alphabet, Google's parent, recently sued Uber for allegedly stealing trade secrets related to that deal.

In January, Intel said it would buy a 15% stake in digital mapmaker Here International B.V., joining with its other core shareholders, BMW, Daimler AG and Volkswagen AG's Audi unit, to develop navigation technology for self-driving cars.

Intel and Mobileye said the deal provides Intel with closer relationships to suppliers and car makers. Last week, Samsung Electronics Co. completed its $8 billion deal to buy Harman International Industries Inc. in its own move into the automotive space.

In a memo to employees, Mobileye executives said Intel's existing automated-driving efforts will be integrated into the company, based in Israel and run by its existing leaders.

The transaction will add to Intel's adjusted per-share earnings and is expected to close in the next nine months.

Write to Austen Hufford at austen.hufford@wsj.com