Intel Close to $15B Altera Acquisition

IntelIntel Corporation (NASDAQ/INTC) is close to a deal to buy smaller chipmaker Altera Corp. (NASDAQ/ALTR) for about $15.0 billion, according to a report in The New York Post. A source close to the situation said Intel could pay as much as $54.00 per share. Altera’s Thursday, May 28 closing price was $46.97.

On Friday, May 29, 2015, Altera’s shares opened at $49.51—nearly six percent higher than the Thursday closing price. Intel’s shares opened at $34.25. The previous close was at $34.01.

Incorporated on March 1, 1989, Intel is engaged in the design and manufacturing of integrated digital technology platforms. The company offers “Intel vPro” technology, a computer hardware-based security technology for the notebook and desktop market segments. The company also offers components for smartphones, tablets, and connected devices, such as baseband processors, radio frequency transceivers, and power management integrated circuits. Intel’s market cap is $161 billion. (Source: Reuters, May 29, 2015.)

Altera was incorporated on March 25, 1997. As a semiconductor company, it designs and sells programmable logic devices, “HardCopy” application-specific integrated circuits, devices, power system-on-chip devices, and associated development tools. The company competes with Lattice Semiconductor Corporation, Microsemi Corporation, and Xilinx Inc. Altera’s market cap is $14.0 billion. (Source: Reuters, May 29, 2015.)

If the deal goes ahead, it could be the biggest acquisition for Intel. The deal could help Intel move away from the personal computer realm into faster-growing sectors like Altera’s data center programmable chips.

Altera reportedly rejected an Intel bid of $54.00 just a few months ago; then broke off sales talks. However, that was before Altera issued disappointing earnings.

CNBC reported earlier this month that the two companies had resumed talks about a possible deal, after earlier negotiations had fallen through in April.

“A deal is likely by the end of next week,” The New York Post quoted the source as saying. The source also cautioned that the talks could still fall apart. (Ibid.)

Deal talks between the two companies first surfaced in March. And media reports suggested that a potential deal could top $10.0 billion, making it Intel’s biggest acquisition ever.