Acquisition: AMD buys Xilinx for $ 35 billion in shares


A rumor becomes reality: AMD announced that it has reached an agreement with the management of Xilinx on the complete acquisition. The purchase price will be $ 35 billion and will be paid in full in AMD stock. The new company is expected to be operational at the end of 2021.

Xilinx is the inventor and the world’s leading manufacturer of programmable logic ICs, the so-called FPGAs (Field-Programmable Gate Arrays). The company was founded in San Jose in 1984 – AMD was 15 at the time.

AMD sees strategic added value especially in the data center segment, where FPGAs are playing an increasingly important role, but also at the edge of the cloud and in end-user devices, the combination of hitherto virtually non-overlapping product portfolios should bear fruit. The market to be served by AMD in the future is expected to contain an annual order volume of up to US $ 110 billion.

The acquisition brings together two industry leaders with complementary product and customer portfolios. AMD will offer the industry’s strongest portfolio of high-performance processor technologies, combining CPUs, GPUs, FPGAs, adaptive SoCs, and deep software expertise to enable leadership computing platforms for cloud, edge and end devices.

AMD for the acquisition

Additionally, AMD hopes to reap financial benefits from the acquisition. Cost savings of US $ 300 million can be expected within the first 18 months as you can combine purchases and use the other company’s facilities.

AMD wants to manage the acquisition entirely through a stock exchange, the shares have increased significantly in value in recent years. For every Xilinx share, the company offers 1.7234 own shares. At the closing price on Tuesday, this means an equivalent of US $ 143 or a premium of 25 percent. After the successful acquisition, the owners of Xilinx will retain 26% and AMD owners 74% of the new group. AMD CEO Dr. Lisa Su remains CEO of the group, Xilinx CEO will lead the integrated division. At least two current Xilinx directors are appointed to the board of directors. The shareholders and regulators of AMD and Xilinx have yet to approve the acquisition.

With stock prices unchanged, the new company’s market value will exceed $ 135 billion. The acquisition is expected to be tax free for Xilinx owners.

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