Intel on Monday announced a US$54-per-share offer for fellow chip maker Altera, in an all-cash deal that values the company at around $16.7 billion.
The combined company will be able to compete better and create new products in the Internet of Things (IoT) and data centre markets, Intel said.
The announcement comes just days after Avago Technologies agreed a $37 billion cash-and-stock deal for Broadcom. And there have been a number of other less high-profile deals in the semiconductor space.
Altera will become an Intel business unit. The companies expect the deal to close within the next six-to-nine months. The companies’ boards have okayed the deal, but it still requires regulatory approvals and the agreement of Altera’s stockholders.
The deal will build on an existing partnership between Intel and Altera. The pair have worked together for the past couple of years, with Intel manufacturing chips for Altera.
"We believe that as part of Intel we will be able to develop innovative FPGAs [field-programmable gate array] and system-on-chips for our customers in all market segments," said Altera CEO John Daane.
"This is an exciting transaction that provides immediate and significant value to our stockholders. We look forward to working closely with the Intel team to ensure a smooth tran sition and complete the transaction as quickly as possible," he said.
Meanwhile, Intel’s growth strategy centres on expanding its 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," he said. "Whether to enable new growth in the network, large cloud data centres 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."
