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Report: Intel Eyeing Israeli Chipmaker Mellanox In $6B Cash-And-Stock Deal

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Report: Intel Eyeing Israeli Chipmaker Mellanox In $6B Cash-And-Stock Deal

Even as chipmakers face a tough semiconductor cycle and an uncertain macro environment, Intel Corporation (NASDAQ: INTC) is apparently unfazed by the surrounding gloom and is looking to invest in inorganic growth.

What Happened

Intel is among the bidders for chipmaker Mellanox Technologies, Ltd. (NASDAQ: MLNX), Israeli publication Calcalistech reported, citing a person familiar with the matter.

Mellanox is an Israel-based provider of chip-based interconnect products that facilitate data transmission between servers and storage and are primarily used in cloud computing.

Recently, Intel tabled a $6-billion cash and stock bid for Melllanox, with the per-share value offered representing a 35-percent premium over the latter's closing price of $81.67 Tuesday, Calcalistech said.

Buckling under pressure from activist investor Starboard Value, Mellanox appointed three independent members to its board in June 2017. Subsequently, there were reports of Mellanox hiring a bank to advise it on takeover interest from two unnamed companies.

CNBC later revealed Xilinx, Inc. (NASDAQ: XLNX) to be among the potential suitors.

Incidentally, Intel acquired Mobileye — another Israeli company that develops vision-based advanced driver-assistance systems — for $15.3 billion in August 2017.

Why It's Important

The deal could boost Intel's data center business in the fluid chipmaker environment. Intel is both a rival as well as a customer of Mellanox, the Israeli website reported.

Intel's data center unit fared below expectations in the recently reported fourth quarter, with the firm predicting a year-over-year decline for the business in Q1.

Mellanox shares were trading up 5.3 percent at $86 at the time of publication Wednesday, while Intel was down slightly at $46.51. 

Related Links:

Intel Shares Drop On Q4 Sales, Q1 Guidance Miss

Morgan Stanley's Key CES Takeaways For Semi Companies

Posted-In: Calcalistech CNBCNews Rumors M&A Tech Media Trading Ideas Best of Benzinga

 

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