Intel acquiring Altera for $16.7 billion

Intel Corp announced on Monday that it plans on acquiring chip maker Altera for $16.7 billion in an all-cash transaction.

The deal represents Intel’s effort to expand its lineup of chips used in data centers.

Intel is offering $54 per share for San Jose, California-based Altera. This is a 10.5 percent premium to Altera’s close on Friday.

The deal has been “unanimously” approved by the Intel and Altera boards. It is expected to close in six to nine months.

Altera focuses on the development of field programmable gate arrays (FPGAs), which are programmable chips that can be configured by customers after manufacturing.

Intel CEO Brian Krzanich said: “Intel’s growth strategy is to expand our core assets into profitable, complementary market segments.

“With this acquisition, we will harness the power of Moore’s Law to make the next generation of solutions not just better, but able to do more.

“Whether to enable new growth in the network, large cloud data centres or IoT segments, our customers expect better performance at lower costs.

“This is the promise of Moore’s Law and it’s the innovation enabled by Intel and Altera joining forces. We look forward to working with the talented team at Altera to deliver this value to our customers and stockholders.”

John Danne, CEO of Altera, commented: “Given our close partnership, we’ve seen first hand the many benefits of our relationship with Intel, the world’s largest semiconductor company and a proven technology leader, and look forward to the many opportunities we will have together.

“We believe that as part of Intel we will be able to develop innovative FPGAs and system-on-chips for our customers in all market segments.

“Together, we expect to drive meaningful value for our customers, partners and employees around the world.”

The deal represents further consolidation in the chip industry

Avago recently agreed to acquire Broadcom for $37 billion and in March, the Dutch chipmaker NXP Semiconductors agreed to acquire Freescale Semiconductor in a deal worth $11.8 billion.