Intel Corp. INTC has finally received the regulatory approval from the Chinese Ministry of Commerce to buy Altera Corp. ALTR, likely to be its biggest buyout ever.
Following the news, Intel’s share price inched up 1.11% to $34.24 while Altera gained a little more than 2% to $53.92.
In Jun 2015, Intel announced its decision to buy Altera, a chip maker specializing in programmable chips, for $54 a share or a total of approximately $16.7 billion. The boards at both the companies unanimously approved the deal, which was pending the requisite regulatory approvals.
Now that the Chinese Ministry of Commerce has granted the last regulatory approval, the acquisition is expected to close by Dec 28.
Altera’s programmable chips that can be configured by customers post purchase, will not only allow Intel to sell cheaper semi-custom-made chips, but also test the waters in the trending “Internet of Things” space. Intel expects to use these chips in clothes and household items, with continued use in cellular base stations and data centers for cloud computing.
Intel remains one of the largest semiconductor chipmakers in the world. The company’s growth strategy is to utilize its core assets to move into profitable and complementary market segments. With cloud computing growing bigger each day, Intel’s increasing demand for chips at data centers and other products outside the PC market remains encouraging.
Currently, Intel carries a Zacks Rank #3 (Hold). A couple of technology stocks worth considering are NVIDIA Corporation NVDA and Texas Instruments Inc. TXN, each sporting a Zacks Rank #1 (Strong Buy).
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