Tech giant Intel has said it is buying rival Altera in a multibillion-dollar deal. The acquisition, which is the largest ever for Intel, is the latest sign of the ongoing consolidation in the semiconductor industry.
US-based chipmaker Intel announced on Monday it was acquiring chip designer Altera for about $16.7 billion (15.25 billion euros) in cash.
Intel will pay $54 per share for Altera, an 11 percent premium to the company's closing price of $48.85 on Friday.
Intel was already partners with Altera, manufacturing some top-end chips designed by the much smaller company, while Altera is using some of Intel's technology in the design of its chips under a long-term agreement reached in 2013.
Intel said the deal would boost its portfolio of chips for data centers and the 'Internet of Things,' an emerging area of transactions that do not require human-to-human or human-to-computer contacts.
Altera is an attractive acquisition target because it makes processors used in phone networks and cars.
Intel has been shifting its attention to those areas because demand for personal computer chips is slipping as more people are relying on smartphones and tablets to connect to the Internet.
Intel is the world's largest maker of PC semiconductors and sells most of the chips used in servers, a much more profitable product. The acquisition of Altera is the biggest in Intel's 47-year history.
The transaction, which still needs approval from Altera shareholders, is targeted to close in six to nine months. It is expected to add to Intel's adjusted earnings per share in the first year after closing.
The deal is the latest in a wave of consolidation in the industry that's aimed at boosting revenue and profit.
The deal comes less than a week after Singapore-based Avago Technologies announced it would take over rival Broadcom in a deal worth $37 billion and aimed at mobile chipmaking.
sri/uhe (AP, AFP)