Intel is going to Purchase Altera as the chipmaker aims to Consolidate
Posted: Jun 02,2015
Intel is in absolute agreement to purchase Altera for about $16.7 billion. It is Intel’s biggest purchase till date and this acquisition has the ability to offer a boost to its data server and Internet of Things Businesses. Intel in a statement said that it intends to close the deal within six to nine months. With the announcement of this deal Altera’s stock increased in excess of 40% and Intel’s share decreased by 1.3%.
The two organizations have already worked together as Intel has manufactured many of Altera’s chips. Intel also aims to utilize Altera’s products with its Xeon data-server chips and the company will turn into a business unit within Intel.
This sort of deal is nothing new in the chips world as it is a continuous consolidation process. The organizations are increasing their strength by purchasing other firms in their field in the hope of being relevant in the capital intensive market and also with the aim of expansion in the Internet of Things. But less number of chip manufacturers holding too much of market share can push prices up as there will be less competition in the market.
The purchase of Altera will assist Intel to build up and strengthen its data center chip business as it is the leading player in this particular field.