AMD in $35 Billion Acquisition of Xilinx
Following several years of hearsay, AMD has entered into an agreement to acquire FPGA manufacturer Xilinx, involving an all-stock transaction valued at $35 billion. The deal will create the semiconductor industry’s leading high performance computing company, significantly broadening AMD’s product portfolio and customer base across diverse growth markets where Xilinx is already an established leader. It is believed that the deal will be immediately accretive to AMD margins, earnings per share and free cash flow generation, and will deliver industry-leading growth.
The acquisition combines two industry leaders, offering complementary product portfolios and customers. The new combined company will offer the industry’s strongest portfolio of high performance processor technologies, combining CPUs, GPUs, FPGAs, Adaptive SoCs and deep software expertise to enable leading computing platforms for cloud, edge and end devices. It will also leverage opportunities spanning some of the industry’s most important growth segments, from data centres to gaming, PCs, communications, automotive, industrial, aerospace and defence.
“Our acquisition of Xilinx marks the next leg in our journey to establish AMD as the industry’s high performance computing leader and partner of choice for the largest and most important technology companies in the world,” AMD President and CEO Dr. Lisa Su said. “This is truly a compelling combination that will create significant value for all stakeholders, including AMD and Xilinx shareholders who will benefit from the future growth and upside potential of the combined company. The Xilinx team is one of the strongest in the industry and we are thrilled to welcome them to the AMD family. By combining our world-class engineering teams and deep domain expertise, we will create an industry leader with the vision, talent and scale to define the future of high performance computing.”
“We are excited to join the AMD family. Our shared cultures of innovation, excellence and collaboration make this an ideal combination. Together, we will lead the new era of high performance and adaptive computing,” said Victor Peng, Xilinx president and CEO. “Our leading FPGAs, Adaptive SoCs, accelerator and SmartNIC solutions enable innovation from the cloud, to the edge and end devices. We empower our customers to deploy differentiated platforms to market faster, and with optimal efficiency and performance. Joining together with AMD will help accelerate growth in our data centre business and enable us to pursue a broader customer base across more markets.”
With a combined team of 13,000 talented engineers and over $2.7 billion of annual research and development investment, AMD will have additional talent and scale to deliver an even stronger set of products and domain-specific solutions.
As part of the acquisition, Xilinx CEO Victor Peng will join AMD as president responsible for the Xilinx business, and at least two Xilinx directors will join the AMD Board of Directors upon closing.
According to the press release, AMD expects to save $300m in combined operational efficiencies within 18 months. The deal has been unanimously approved by both sets of directors, and is subject to the approval of both sets of shareholders. The transaction is expected to close by the end of 2021.