Intel to Buy Altera for $16.7 Billion

Intel has signed a definitive agreement to acquire Altera in an all-cash transaction which values the deal at $16.7 billion. This is the second major semiconductor acquisition in days, following the sale of Broadcom to Avago last Friday (Avago to Buy Broadcom for $37 Billion).

The acquisition will couple Intel’s products and manufacturing processes with Alter’a field-programmable gate array (FPGA) technology. The company believes this will enable Intel to develop new classes of products that meet customer needs in the data centre and Internet of Things market segments. Intel plans to offer Altera’s FPGA products with Intel Xeon processors as highly customised, integrated products.

Intel had been in talks with Altera earlier this year, though it was reported that the two companies had been unable to agree a price and negotiations broke down. The deal is reputed to be one of Intel’s biggest ever acquisitions. Intel and Altera already have a close working partnership as Intel manufactures some of the chips designed by Altera, while Altera uses some of Intel’s technology in the design of its chips.