China approves AMD’s takeover of Xilinx
AMD (Advanced Micro Devices) touted acquisition of Xilinx, announced in October 2020, is finally getting approval from the last regulatory agency after it was granted from US and European entities. Last week, China’s State Administration for Market Regulation gave its go-ahead for the merger, and the two semiconductor producers will complete the deal by the end of March 2022. According to an announcement made in October 2020, each share of Xilinx will convert to 1.7234 shares of AMD.
In the wake of the pandemic, Xilinx’s chips have gained attention, driven by a surge in work from home dynamics that pushed companies to improve their technology and storage capabilities.
The Chinese regulator stipulated that AMD could proceed if its and Xilinx’s chips will continue to be made available to China as they have been in the past.
Once the acquisition is complete, AMD will enter new markets (aerospace and defense, automotive, wired, and wireless network infrastructure) and further compete with its long-time rival Intel. This merger is also a big deal: AMD has nearly $121 billion enterprise value, while Xilinx is valued at $41 billion.
Now, AMD earnings will be in focus. The company is expected to report figures after the market close.
The market received the news positively, with AMD stock price trading 2.61% higher and Xilinx up 2.30%.
Sources: finance.yahoo.com, fool.com