AMD attempting to merge with semiconductor company Xilinx
Advanced Micro Devices (AMD), an American company that develops computer processors and related technologies, is in talk to buy the rival processing-platform maker Xilinx. Rumours say that the merger can be valued at over $30 billion (current Xilinx’s market value is around $28 billions) and the deal under discussion can come together even by the end of next week [1]. This year AMD saw a growth of 89% as the covid-pandemic notably increased the demand for computers and gaming consoles that make use of their products. Hence, the Santa Clara based company, is seeking to close this deal in order to further shrink the competitive gap that separates it from the semiconductors market leader Intel [2].
The news has been reported on The Wall street Journal yesterday, and today AMD shares value saw a decline of the 3%, contrasting the high hopes brought to investors by the rise of Xilinx shares value of over 13% [3].
Since the world is now facing uncertain times due to the pandemic and the US is running the new president elections, we will see in the coming days whether the deal will turn out to be a bust or a potential success for ADM.
IN DEPTH LOOK AT THE TWO COMPANIES:
· AMD is an American multinational semiconductor company based in Santa Clara, California. It develops and (partially) produces CPUs and APUs, graphic products and GPUs, game console products, and other hardware products. With over 10k employees, the business current capitalization is $100billion and is the second largest company in its field.
· Xilinx is an American multinational tech company based in San Jose, California. It develops flexible and adaptive processing platforms and is widely known as it invented the FPGA, the SoCs and the ACAP (which are integrated circuits). The business current capitalization is $28 billions, and their products are used in many other fields such as: automotive, 5G wireless, aerospace and medical.
[1] https://www.wsj.com/articles/amd-is-in-advanced-talks-to-buy-xilinx-11602205553 [2] https://www.thestreet.com/investing/xilinx-shares-surge-on-reports-of-30-billion-amd-takeover [3] www.yahoofinance.com
Sources:
https://finance.yahoo.com/news/amd-said-talks-buy-rival-022904775.html
https://en.wikipedia.org/wiki/Advanced_Micro_Devices
https://en.wikipedia.org/wiki/Xilinx
https://en.wikipedia.org/wiki/Intel
https://www.wsj.com/articles/amd-is-in-advanced-talks-to-buy-xilinx-11602205553
https://www.thestreet.com/investing/xilinx-shares-surge-on-reports-of-30-billion-amd-takeover
Autore: Matteo Marletto, M&A Junior Associate