Intel confirmed its anticipated acquisition of semiconductor company Altera, with a definitive agreement signed for an approximately $16.7 billion all-cash deal.
In a statement, Brian Krzanich, CEO of Intel, said: “Intel’s growth strategy is to expand our core assets into profitable, complimentary 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.”
The deal will couple Intel’s products and manufacturing process with Altera’s field-programmable gate array technology. This is “expected to enable new classes of products that meet customer needs in the data centre and Internet of Things (IoT) market segments”.
Altera will become an Intel business unit in order to “facilitate continuity of existing and new customer sales and support”. Intel also plans to continue support and development for Altera’s ARM-based and power management product lines.
Intel and Altera were reported to have held talks earlier this year, which ended with a dispute over valuation – although the $54 per share mooted then is the same as for today’s deal.
Observers at this point question Altera’s ability to deliver shareholder value above that available from Intel’s offer.
The deal has been approved by the boards of Intel and Altera, and is subject to certain regulatory and customary closing conditions, including the approval of Altera’s stockholders.