- Xilinx shares soared as much as 17% higher in early Tuesday trading after Advanced Micro Devices agreed to buy the company in a $US35 billion deal.
- The acquisition is expected to close by the end of 2021, according to a press release. Xilinx shareholders will receive 1.7234 shares of AMD for each Xilinx share they own.
- The combined entity will boast more than 13,000 engineers and give AMD a major leg-up in the communications technology business, particularly against rival firm Intel.
- Watch Xilinx trade live here.
The deal is expected to close by the end of 2021, according to a press release. AMD’s all-stock purchase will grant current Xilinx shareholders 1.7234 shares of AMD for each Xilinx share they own. Current AMD shareholders will own 74% of the new company, while Xilinx investors will own the remaining 26%.
The combined entity will boast more than 13,000 engineers and help both firms compete with lagging industry titan Intel. AMD also expects to unlock roughly $US300 million worth of operational efficiencies through the deal over the next 18 months.
Still, AMD shares fell slightly in early Tuesday trading.
Xilinx similarly rallied on October 9 after The Wall Street Journal first reported on the potential AMD deal. The leap placed shares at their highest point since July 2019.
The acquisition is the latest mega-deal to hit the semiconductor sector this year. It dwarfs Analogue Devices’ purchase of Maxim Integrated Products for $US20 billion and falls just short of tying Nvidia $US40 billion takeover of Arm Holdings.
Xilinx produces chips used in data centres and 5G base stations, giving AMD a major leg-up in the communications technology business. It also alleviates some concerns around future revenue. Xilinx shares tumbled through 2019 after US-China trade tensions limited shipments from Huawei. The Chinese tech giant accounts for 8% of Xilinx’s revenue.
Xilinx closed at $US114.55 per share on Monday, up about 17% year-to-date.
AMD closed at $US82.23, up roughly 81% year-to-date.
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