US giant Intel Corp. said Monday that it has agreed to buy Mobileye, a Jerusalem-based developer of advanced vision and driver assistance systems, for $15.3 billion. The American chipmaker hopes the purchase will position it as a leading technology player in the fast-growing self-driving car market.

Mobileye develops the sensors and artificial intelligence that allow a vehicle’s on-board computer to essentially know where it is in relation to other vehicles, pedestrians and the surroundings, the key technologies needed for cars to eventually safely drive themselves.

The deal, the largest ever purchase of an Israeli high-tech company, was hailed across Israel as a sign of the country’s technological prowess.

“Congratulations to Mobileye! Israeli genius, Israeli pride,” Prime Minister Benjamin Netanyahu tweeted.

“Israel is a superpower in knowledge, technology and innovation,” said Science and Technology Minister Ofir Akunis.

“The fact that large international companies see potential in Israel and are seeking to acquire Israeli companies that lead their prospective fields is a source of national pride for our technological strength,” he said.

“This is by far the biggest deal in Israeli high-tech,” Koby Simana, the CEO of IVC Research Center, which tracks Israel’s high-tech industry told The Times of Israel. “It is a huge Israeli success of a company that was founded at the Hebrew University of Jerusalem some 20 years ago.”

An interesting journey lies ahead

In a message to employees, Mobileye co-founders Ziv Aviram and Amnon Shashua said they would seek to retain control of the day-to-day running of the company, but stood to benefit from Intel’s vast experience.

“Intel is not looking to have their people come in and run Mobileye — but that being said, there is much to learn from Intel’s experience, culture, expertise and resources in many fields tangential to our own and we plan to embrace this opportunity to learn and tap into their knowledge,” they said in a message that was also posted on the Intel website.

“All in all, an interesting journey is ahead. We always wanted to change the world – now we have better means of doing so.”

Intel’s CEO Brian Krzanich explained why the company was so keen to move into the world of self-driving cars.

“Many of you have asked why we think autonomous cars and vehicles are so important to Intel’s future,” Krzanich said in an email message to Intel employees on Monday.

“The answer is DATA. Our strategy is to make Intel the driving force of the data revolution across every technology and every industry. We are a DATA company. The businesses we focus on, and deliver solutions to, create, use and analyze massive amounts of data,” he wrote.

Multi-billion-dollar acquisition

Following the agreement, a subsidiary of Intel will put out a tender to acquire all of the issued and outstanding ordinary shares of Mobilieye for $63.54 per share in cash, representing an equity value of an estimated $15.3 billion and an enterprise value of $14.7 billion, Intel said in a statement.

The acquisition represents a premium to the market value of Mobileye, which was traded on the New York Stock Exchange at a market valuation of around $10.5 billion before the deal was announced. The company’s shares closed at $47.27 on Friday. Mobileye shares were trading 30% higher at $61.36 at 10.26 am in New York.

Prior to this, the largest tech deal ever in Israel was the sale of NDS Group Ltd. to Cisco in 2012 for $5 billion, followed by the sale of Chromatis Networks to Lucent Technologies for $4.7 billion in 2001, Simana said.

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.

Israeli website TheMarker first reported on the deal earlier Monday.

Intel estimates the vehicle systems, data and services market opportunity to be worth up to $70 billion by 2030. The transaction is expected to close within the next nine months, and Intel expects it to boost its non-GAAP earnings per share and its free cash flow. Israeli entrepreneur and investor, Yossi Vardi, who is considered the godfather of the Israeli tech scene, called the magnitude of the deal “stunning.” The fact that a giant like Intel has chosen to acquire Mobileye is a further “endorsement of the quality of Israeli high-tech,” Vardi said in an interview to the Israel Project.

The acquisition will combine the best-in-class technologies from both companies, spanning connectivity, computer vision, data center, sensor fusion, high-performance computing, localization and mapping, machine learning and artificial intelligence, according to Intel.

The US firm will support Mobileye’s production programs and build up its relationships with car suppliers and Original Equipment Manufacturers (OEMs), Intel said. The combined organization will be headquartered in Israel and led by Amnon Shashua, Mobileye’s co-founder, chairman and chief technology officer.

All of Mobileye’s current 660 workers are expected to continue employment following the close of the deal, the companies said in a “frequently asked questions” statement released with the announcement. The Israeli firm estimates that as of December 31, 2016, its products were installed in approximately 15.7 million vehicles worldwide and its technology is available with 21 OEMs.

“This acquisition is a great step forward for our shareholders, the automotive industry and consumers,” said Krzanich. “Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers.”

Mobileye, Intel and BMW struck up a partnership in July last year in the field of autonomous cars, and in January the companies forecast that a fleet of about 40 autonomous BMW cars will be on the roads by the second half of 2017.

“By pooling together our infrastructure and resources, we can enhance and accelerate our combined know-how in the areas of mapping, virtual driving, simulators, development tool chains, hardware, data centers and high-performance computing platforms,” said Mobileye’s Aviram. “Together, we will provide an attractive value proposition for the automotive industry.”

Automakers including GM, Toyota and Volkswagen have been acquiring startups and taking stakes in technologies in an effort to stay at the leading edge of developments.

Auto tech startup financing topped $1 billion in 2016 with sector financing reaching a “frenzied pace,” according to New York-based data firm CB Insights.

Last April, Intel’s CEO Krzanich, laid out the company’s new strategy of transforming Intel from a PC company to one that powers the cloud and billions of smart, connected computing devices.