Vodafone said today it agreed with the main shareholders of Varese, Italy-based Cobra to buy their combined 74 percent stake, and offered to buy the rest. Cobra and its units count Renault SA, Toyota Motor Corp. and Ferrari SpA among their customers, as well as insurance companies, which, for instance, get automatically notified via sensors if a crash occurs.
Carmakers, phone companies and software makers are seeking to win more business by adding Internet access and automation into cars and other connected devices such as vending machines. Google Inc. (GOOG) last month showed how lines among the three industries are blurring by unveiling its own design for a driverless vehicle.
“Vodafone is looking to make their solutions in enterprise more unified,” said Guy Peddy, a Macquarie Bank Ltd. analyst in London with a neutral rating on the carrier’s shares. “If I’m having a generic SIM-card relationship with a carmaker, I should try to get more of the value chain by providing the software as well.”
Cobra jumped 49 percent to 1.47 euros at 1:40 p.m. in Milan, just short of the 1.49 euro per-share offer by Newbury, England-based Vodafone. Cobra has a market value of 143 million euros ($194 million). Vodafone declined 0.5 percent to 194.10 pence on the London exchange.
In March, Vodafone won a deal to supply SIM cards -- the small plastic chips in connected devices that contain subscriber data -- to Volkswagen AG and its Audi luxury unit. The company has a similar agreement with Bayerische Motoren Werke AG.
Today’s deal will allow Vodafone to offer automakers a suite of connectivity and applications and a better opportunity to win more contracts, according to spokesman Simon Gordon. Vodafone may also use Cobra’s tracking technology, which is used to locate stolen cars, in fleet management and distribution of white-label goods, he said.
In a similar move, Verizon Communications Inc. acquired Hughes Telematics Inc. in 2012 for $612 million.
Vodafone could eventually move further into fields outside of transmitting calls and data by acquiring makers of hardware, such as sensors, Gordon said, adding that no such move is imminent.
Vodafone also agreed with some shareholders of Cobra’s telematics unit to buy their 20 percent holding if the bid for the parent is successful. Net debt at Cobra, which began trading in Milan in 2006, was 48 million euros as of March 31.
Vodafone is the world’s second-largest wireless carrier, trailing only China Mobile Ltd. in number of customers.
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