Intel confirms acquisition of Altera for $54 per share in an all-cash transaction.
A definitive agreement has today been reached for Intel to aquire Altera, in a deal first reported by CBR last week.
Last week CBR speculated that the deal could come in at £15 billion, but today we can confirm that the deal is being valued at $16.7 billion.
The top dog of processor chips will acquire smaller rival Altera for $54 per share in an all-cash transaction, a share price which was initially rejected earlier in April in initial talks with Intel.
"Intel’s growth strategy is to expand our core assets into profitable, complementary market segments," said Brian Krzanich, CEO of Intel.
"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 centers 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."
Altera will become an Intel business unit to facilitate continuity of existing and new customer sales and support. Intel plans to continue support and development for Altera’s ARM-based and power management product lines.
The transaction is expected to be accretive to Intel’s non-GAAP EPS and free cash flow in the first year after close. Intel intends to fund the acquisition, which is expected to close within six to nine months, with a combination of cash from the balance sheet and debt.
The semiconductor industry is currently a hotbed of M&A activity, with CBR also reporting the largest ever tech deal on record between Avago Technologies and Broadcom.