A combination of pictures taken in Jerusalem on March 13, 2017, shows the logos of U.S. computer chip giant Intel (top) and Israeli auto tech firm Mobileye.
"It's an area where the company (Intel) has had very little presence - the automotive market, and so this is a tremendous opportunity for them to get into a market that has significant growth opportunities", said Betsy Van Hees, an analyst at Loop Capital Markets who has a "buy" rating on Intel shares.
Intel said Shashua will head Mobileye and Intel's automated driving group in Israel.
"The addition of Mobileye to our family provides the data path to our computing solutions becoming the intelligent set of eyes that will allow a vehicle to see and define the world around it", said Brian Krzanich, Intel's chief executive, in a letter to employees.
Mobileye generated $358 million in revenue previous year and $108 million in net income, meaning it's getting taken out at 42.7 times sales and 141.7 times earnings.
It is the biggest technology takeover in Israel's history and the largest purchase of a company exclusively focused on self-driving.
At a price of $63.54 per share, the offer for Mobileye is a more than 34% premium from its March 10 closing price of $47.27.
Intel Corp. continued its foray into the autonomous vehicle sector this week with the acquisition of computer vision and machine-learning specialist Mobileye for about $15 billion in cash.
The technology that Intel and MobilEye are working on won't just be limited to BMW cars, though.
Intel will blend its expertise in hardware chips with Mobileye's collision detection software to form a comprehensive portfolio of autonomous driving technologies.
Mobileye is the central player in Israel's burgeoning automotive technology sector, which hosts development centers for no less than four major vehicle companies.
At the same time, Intel gains access to Mobileye's EyeQ system-on-a-chip (SoC) technology, which helps collect the data from a variety of sensors and cameras installed in the vehicle.
The deal for Mobileye N.V. (NYSE: MBLY) follows Intel's announcement in January that it would acquire a 15 percent stake in digital map and location services specialist HERE.
Mobileye was cofounded in 1999 by Amnon Shashua and Ziv Aviram. The two companies announced plans to put 40 autonomous BMW cars on American and European roads by the end of this year.