Intel buys Altera for $17bn as PC market falters
TECH giant Intel is buying Altera in an all-cash deal valued at around $16.7bn (£11bn), offering $54 per share, confirming earlier reports of a potential acquisition.
“Intel’s growth strategy is to expand our core assets into profitable, complementary market segments,” said Intel chief executive Brian Krzanich.
“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.”
Altera makes programmable chips used in Internet of Things (IoT) devices and increasingly cloud computing and the deal expands Intel’s reach in these areas.
“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,” added Krzanich.
Intel will fund the deal, the largest in its history and due to complete within six to nine months, through a combination of existing cash and debt.
The deal price is unchanged from Intel’s unsolicited offer that sources had said Altera rejected in April.
Altera’s programmable chips will allow Intel to increase the computational capability of its Xeon server chips, which could be under attack post the Avago-Broadcom merger, Summit Research analyst Srinivasan Sundararajan told Reuters yesterday.
Intel’s deal for Altera is its biggest since it bought security software maker McAfee in 2011 for $7.7bn.
It also underscores Krzanich’s determination to expand beyond chips for PCs, the firm’s mainstay. Intel slashed nearly $1bn from its first-quarter revenue forecast in March, saying small businesses were delaying PC upgrades.