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Advanced Micro Devices to Buy Xilinx in $35B All-Stock Deal

Advanced Micro Devices (Nasdaq: AMD) has agreed to acquire Xilinx (Nasdaq: XLNX) in an all-stock deal worth approximately $35B as part of AMD’s efforts to expand its data center business and portfolio of technology products.

The boards of directors of AMD and Xilinx unanimously cleared the transaction, which is expected to be completed by the end of calendar year 2021, the companies said in a joint statement published Tuesday.

Lisa Su, president and CEO of AMD, said the company and Xilinx will combine their deep domain expertise and engineering teams to establish a combined entity with “the vision, talent and scale to define the future of high performance computing.”

“Joining together with AMD will help accelerate growth in our data center business and enable us to pursue a broader customer base across more markets,” said Victor Peng, president and CEO of Xilinx.

Su will serve as CEO of the combined company and Peng will assume the role of president. At least two directors from Xilinx will join AMD’s board upon the deal’s completion.

AMD will have an enterprise value of around $135B, over $2.7B in annual research-and-development funds, about 13K engineers and a portfolio of HPC technologies, including field programmable gate arrays, central processing units, adaptive SoCs and graphic processing units. The combined company will also explore growth opportunities in aerospace and defense, communications, industrial and automotive, among other segments.

The Wall Street Journal reported that Xilinx chips are used in the Lockheed Martin-built (NYSE: LMT) F-35 fighter jet and 5G networks.

AMD will own approximately 74 percent of the combined entity and expects to get about $300M in operational efficiencies within 18 months of the deal’s closing. Xilinx shareholders will keep the remaining equity stake and will get 1.7234 shares in the combined firm for each share they own.

The combination is expected to be tax-free and is subject to customary closing conditions, including regulatory clearances and approvals by shareholders of both companies.

Credit Suisse and DBO Partners serve as AMD’s financial advisers in the transaction, while Latham & Watkins LLP acts as its legal adviser. 

Morgan Stanley acts as Xilinx’s lead financial adviser. BofA Securities and Skadden, Arps, Slate, Meagher & Flom LLP respectively serve as financial adviser and legal counsel to Xilinx.

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