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Intel near deal to purchase Altera for $16 bln, Reuters reports

Last updated: 16:15 29 May 2015 EDT, First published: 14:15 29 May 2015 EDT

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If the deal does go ahead, it would be the biggest acquisition for $160-billion-market-cap Intel.

Intel (NASDAQ:INTC) has resumed negotiations to buy smaller chip maker Altera (NASDAQ:ALTR) and is close to a $16 billion acquisition agreement, Reuters reported today, citing people familiar with the matter.

The price for Altera could be as much as $54 per share, a 15 percent premium over its Thursday closing price of $46.97. 

That would value Altera at more than $16 billion, Reuters quoted one of the people as saying.

Altera shares were up 4.8 percent at $49.20 during morning trading in New York. Intel shares were up 1.4 percent at $34.47.

The deal could be reached in the coming days, Reuters reported, citing the sources, who cautioned that no agreement was certain and asking not to be identified because the negotiations are confidential.

If the deal does go ahead, it would be the biggest acquisition for $160-billion-market-cap Intel, according to the New York Post, and could help it move away from PC sales into faster-growing sectors like Altera's data center programmable chips.

Altera reportedly rejected an Intel $54 bid just a few months ago and then broke off sales talks, but that was before Altera issued disappointing earnings.

Intel is not interested in making a counterbid against Avago Technologies for Broadcom, sources said. Avago Technologies agreed yesterday to buy Broadcom for $37 billion, in the largest merger of chipmakers ever.

Earlier this year, Intel signed a standstill agreement with Altera that expires on June 1, giving the world's largest chipmaker the option to launch a hostile bid after that, Reuters reported in April.

Intel, the largest chipmaker on Earth, makes the processors that power the majority of the world's personal computers and data-center servers. Altera, meanwhile, focuses on chips called field-programmable gate arrays that customers can reprogram for specific tasks and that are used in the automotive, aerospace and medical industries.

 

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