With the acquisition, the two companies hope to combine Intel’s manufacturing process and products with Altera’s field-programmable gate array (FPGA) technology. The combination aims to create new classes of products that meet customer needs in the data centre and Internet of Things (IoT) market segments. Intel plans to offer Altera’s FPGA products with Intel Xeon processors as highly customised, integrated products. The companies also expect to enhance Altera’s products through design and manufacturing improvements resulting from Intel’s integrated device manufacturing model.
“Intel’s growth strategy is to expand our core assets into profitable, complementary market segments,” said Brian Krzanich, CEO of Intel. “With this acquisition, we aim to make the next generation of solutions not just better, but also more. Whether it is a new growth in the network, large cloud data centres or IoT segments, our customers and us expect better performance at lower costs. We look forward to working with Altera to serve our customers and stockholders better.”
“Working with Intel has let us see first-hand the many benefits they can bring, and we look forward to having more opportunities together,” said John Daane, President, CEO and Chairman of Altera. “As part of Intel, we will be able to develop innovative FPGAs and system-on-chips for our customers in all market segments. This is an exciting transaction that provides immediate and significant value to our stockholders. We look forward to working closely with the Intel team to ensure a smooth transition and complete the transaction as quickly as possible.”
Altera will become an Intel business unit to facilitate continuity of existing and new customer sales and support. Intel plans to continue support and development for Altera’s ARM-based and power management product lines.
The transaction is expected to be positively benefit Intel’s non-GAAP EPS and free cash flow in the first year after close. The acquisition is expected to close within six to nine months, with a combination of cash from the balance sheet and debt.
The transaction has been unanimously approved by the Boards of Directors for both companies and is subject to certain regulatory approvals and customary closing conditions, including the approval of Altera’s stockholders.
