Intel Agrees $16.7 Billion Purchase of Altera Corp
Ashley Allen / 1 year ago
Chip giant Intel has agreed a deal to buy PLD (programmable logic device) manufacturer Altera for $16.7 billion, consolidating the company’s presence in data centres. Intel will pay $54 a share, all-cash, for Altera at a premium of 11% over its closing share price on Friday.
The Intel/Altera merger comes in the wake of rising manufacturing costs, with Intel intent on making its profitable semiconductor business – worth $300 billion globally – yield even greater returns. The purchase follows last week’s record-breaking deal that saw Avago Technologies buy Broadcom Corp. for $37 billion. The two deals now make 2015 a phenomenal year for the semiconductor market.
“Management teams are looking at their business and predicting little growth going forward,” Gus Richard, an analyst at Northland Securities Inc., said. “The M&A wave is a function of them trying to drive earning growth. Intel’s purchase of Altera is one of the few strategic moves that is being made currently.”
“The acquisition will couple Intel’s leading-edge products and manufacturing process with Altera’s leading field-programmable gate array (FPGA) technology,” an Intel statement reads. “The combination is expected to enable new classes of products that meet customer needs in the data center and Internet of Things market segments.”
Following the announcement, stock in Altera rose by 6.2% to $51.86 a share, while Intel fell by 1.3% to $34.
Thank you Bloomberg for providing us with this information.
Image courtesy of 3DPrint.