Intel is close to agreeing a $17 billion takeover of chipmaker Altera that could be announced as soon as today (1 June), according to several reports.
Talks between Intel and Altera ended early in April 2015, after the target turned down an offer at a 50 per cent premium on its share price before talks were revealed.
Altera stockholders will receive around $54 a share, according to sources, around the same level as the offer rejected back in May.
In April, Altera announced an 18.6 per cent drop in profit to $94.9 million for the quarter to 27 March 2015, on revenue which fell 5.6 per cent to $435.5 million.
The semiconductor sector has seen a wave of consolidation in recent times as companies look for new avenues to increase revenue.
Buyers are attracted to acquisitions by factors like selling more chips through sales channels that stay roughly the same size, as well as saving on the cost of designing and manufacturing new chips. Intel and Altera are already partners, which also helps.
Just last week, semiconductor company Avago Technologies acquired rival Broadcom in a $37 billion deal.
Intel, a leader in processor chips, is likely to use Altera’s line of programmable chips to increase revenue in times when a slowdown in PC demand is hindering its growth.
Altera may also help Intel to protect its position as a provider of chips for server systems, a major source of Intel’s revenue.