AMD is expanding in the infrastructure market with an agreement to acquire Xilinx in an all-stock transaction worth USD 35 billion. The takeover will expand the breadth of AMD’s portfolio with new products to target the growing data centre segment, where rival Intel also has been expanding.
AMD said the acquisition will give it the industry’s strongest portfolio of high-performance processor technologies, combining CPUs, GPUs, FPGAs, adaptive SoCs and deep software expertise to enable computing platforms for cloud, edge and end devices. This takes it beyond the shrinking PC market to target new growth segments such as servers for the data centre and network infrastructure market, new connected devices in gaming and communications, and automotive, industrial, aerospace and defense applications.
Under the terms of the agreement, Xilinx stockholders will receive 1.7234 shares of AMD common stock for each share of Xilinx. This gives Xilinx a value of USD 143 per share, compared to a closing price of USD 117 the day before the deal was announced. On a fully diluted basis, Xilinx shareholders will hold 26 percent of the combined group after the merger.
Lisa Sui will remain CEO of the combined group. Xilinx CEO Victor Peng will join AMD as president responsible for the Xilinx business and strategic growth initiatives. In addition, at least two Xilinx directors will join the AMD board.
AMD expects synergies of USD 300 million within 18 months of closing thanks to integration of the two companies. The synergies are expected to come mainly from savings on costs of goods sold, shared infrastructure and streamlining common areas.
The offer remains subject to approval from both AMD and Xilinx shareholders and certain regulators. It's expected to close by the end of calendar year 2021.
