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According to FT, advanced chip maker Micro Micro Devices has reached an agreement to acquire competitor Xilinx in a $ 35 billion deal as it wants to expand its ambitions in the data center market.
The transaction could be completed by the end of 2021 and will create a giant with 13,000 engineers and an annual investment of $ 2.7 billion in research and development. AMD explained that the transaction will save $ 300 million over the next 18 months.
The combination of the two US companies will intensify AMD’s fight with Intel for the data center chip market. Additionally, AMD also produces chips for computers and game consoles, both categories experiencing strong growth during the pandemic.
“The acquisition of Xilinx marks the next step in our journey to position AMD as a market leader and primary partner of the world’s leading technology companies,” said Lisa Su, CEO of AMD.
Xilinx shareholders will receive 1.72 AMD shares for every Xilinx share they own. That price increases the value of a Xilinx stock to $ 143, nearly 25% above the value recorded at the close of Monday’s trading session.
AMD shareholders will own 74% of the company following the transaction and Xilinx shareholders will control the remaining 26%.
AMD also reported quarterly results on Tuesday, with revenue growth of 56% year-over-year for the quarter ended September.
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