Intel announced a $16.7 billion purchase of Altera Corporation today, promising that it will empower Intel to provide faster systems at lower costs. The cash acquisition values Altera at $54 per share and has been approved by the boards of both Altera and Intel.
“Intel’s growth strategy is to expand our core assets into profitable, complementary market segments,” Intel CEO Brian Krzanich said in a statement. “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.”
Intel and Altera reportedly began talks in late March of this year, but attempts to strike a deal temporarily fell apart when Altera rejected an offer in the neighborhood of $54 per share. Since then, the tides have changed and Intel was able to make the official announcement this morning.
Altera is a chip designer that already has a relationship with Intel. The latter expects the acquisition to give a boost to its efforts in the data center market and with devices the company is developing for “Internet of things” (IoT) markets. The product Intel appears most interested in is Altera’s field-programmable gate array (FPGA), which is an integrated circuit that supports aftermarket programming.
“We believe that as part of Intel we will be able to develop innovative FPGAs and system-on-chips for our customers in all market segments,” said Altera President, CEO and Chairman John Daane. “Together, we expect to drive meaningful value for our customers, partners and employees around the world.”
So far, Intel appears more interested in bringing Altera under its umbrella than absorbing the company. The company didn’t hint at any staffing changes and its statement assured readers that the Altera’s ARM-based chips will be developed going forward. The same is true for the company’s power management products.
The deal, which is being advised by J.P. Morgan Securities and Goldman, Sachs & Co., among others, is expected to close in the next six to nine months.