AMD (NASDAQ: AMD) and Xilinx (NASDAQ: XLNX) say they have agreed to a deal that will see the former acquire the latter in an all-stock transaction valued at $35 billion. The acquisition, unanimously approved by the AMD and Xilinx boards, is slated to close by the end of next year, subject to approval by AMD and Xilinx shareholders, certain regulatory approvals and other customary closing conditions.
The companies say the combination of Xilinx’s expertise in FPGAs and adaptive SoCs with AMD’s chip and software portfolio (including CPUs and GPUs) will create the market leader in computing platforms for cloud, edge and end devices. The combined company will address applications in data centers, gaming, PCs, communications, automotive, industrial, aerospace, and defense. AMD says it expects the acquisition to prove immediately accretive to the company’s margins, EPS, and free cash flow generation as well as an engine for growth. AMD puts the combined enterprise value at approximately $135 billion.
“Our acquisition of Xilinx marks the next leg in our journey to establish AMD as the industry’s high performance computing leader and partner of choice for the largest and most important technology companies in the world,” AMD President and CEO Dr. Lisa Su said. “This is truly a compelling combination that will create significant value for all stakeholders, including AMD and Xilinx shareholders who will benefit from the future growth and upside potential of the combined company. The Xilinx team is one of the strongest in the industry and we are thrilled to welcome them to the AMD family. By combining our world-class engineering teams and deep domain expertise, we will create an industry leader with the vision, talent, and scale to define the future of high-performance computing.”
“Our leading FPGAs, Adaptive SoCs, accelerator and SmartNIC solutions enable innovation from the cloud, to the edge and end devices,” added Victor Peng, Xilinx president and CEO. “Joining together with AMD will help accelerate growth in our data center business and enable us to pursue a broader customer base across more markets.”
Su will head the combined company as CEO. Xilinx’s Peng will join AMD as president responsible for the Xilinx business and strategic growth initiatives, effective upon the deal’s successful consummation. In addition, at least two Xilinx directors will join the AMD Board of Directors.
The agreement calls for Xilinx stockholders to receive a fixed exchange ratio of 1.7234 shares of AMD common stock for each share of Xilinx common stock they hold. Based on the exchange ratio, this represents approximately $143 per share of Xilinx common stock. Post-closing, current AMD stockholders will own approximately 74% of the combined company on a fully diluted basis, with Xilinx stockholders in possession of the rest.
AMD expects to achieve operational efficiencies of approximately $300 million within 18 months of the acquisition’s close, based primarily on synergies in costs of goods sold, shared infrastructure, and via “streamlining common areas.”
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Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
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