Published in PC Hardware

Intel will buy Altera today

by on01 June 2015

We said that this would happen and no one believed us

They said it could not happen, it nearly didn't, but we have it on good authority that Intel is going to announce that it is buying Altera for $17 billion today.

Altera and Intel have been having on again off again negotiations for about a year with the sticking point apparently being the price.

However there seems to be an ongoing wave of industry consolidation which Intel and Alteria needs to surf or be eating by the great white shark of competition.

On Sunday, The Wall Street Journal reported that "people familiar with the matter" said Altera shareholders would receive about $54 per share, similar to the offer the San Jose, California, company recently rejected.  The paper noted the deal could still collapse but our source has suggested otherwise.

If the deal it will be the biggest buy out in Intel's 47-year history, so big in fact that many insisted it would never happen.

Intel, based in Santa Clara, California, is the world's largest maker of PC chips and sells most of the chips used in servers, a much more profitable product. It already partners with Altera, manufacturing some top-end chips designed by the much-smaller company, while Altera has used some of Intel's technology in the design of its chips under a long-term agreement reached in 2013.

Altera is attractive because it makes chips used in phone networks and cars. Intel has been looking to get into those areas as demand for personal computer chips slips due to the downturn in the sales of desktop and laptop computers as more people rely on smartphones and tablets to connect to the Internet.

Altera also sells chips known as field-programmable gate arrays that customers can later configure for specific processing or data-storage functions, including for use in cellular base stations and switching systems.

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