- Today AMD (NASDAQ: AMD) and Xilinx (NASDAQ: XLNX) have confirmed that they have entered into a definitive agreement for AMD to buy Xilinx in an all-stock transaction valued at $35 billion. These are the details.
Today AMD (NASDAQ: AMD) and Xilinx (NASDAQ: XLNX) have confirmed that they have entered into a definitive agreement for AMD to buy Xilinx in an all-stock transaction valued at $35 billion. This combination will create the industry’s leading high-performance computing company and significantly expand the breadth of AMD’s product portfolio and customer set across diverse growth markets where Xilinx is an established leader. The deal is expected to be immediately accretive to AMD margins, EPS and free cash flow generation and deliver industry-leading growth.
The deal brings together two industry leaders with complementary product portfolios and customers. And AMD will offer the industry’s strongest portfolio of high-performance processor technologies, which combines CPUs, GPUs, FPGAs, Adaptive SoCs, and deep software expertise to enable leadership computing platforms for cloud, edge, and end devices. The combined company will capitalize on opportunities spanning some of the industry’s most important growth segments from the data center to gaming, PCs, communications, automotive, industrial, aerospace, and defense.
With a combined team of about 13,000 talented engineers and over $2.7 billion of annual R&D investment, AMD is going to have additional talent and scale to deliver an even stronger set of products and domain-specific solutions.
As part of the agreement, Xilinx stockholders will receive a fixed exchange ratio of 1.7234 shares of AMD common stock for each share of Xilinx common stock they hold at the closing of the transaction. And based on the exchange ratio, this represents approximately $143 per share of Xilinx common stock. Post-closing, current AMD stockholders will own approximately 74% of the combined company on a fully diluted basis while Xilinx stockholders will own approximately 26%. The deal is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.
AMD is expecting to achieve operational efficiencies of approximately $300 million within 18 months of closing the transaction, primarily based on synergies in costs of goods sold, shared infrastructure, and through streamlining common areas.
The deal has been unanimously approved by the AMD and Xilinx Boards of Directors. And the acquisition is subject to approval by AMD and Xilinx shareholders, certain regulatory approvals and other customary closing conditions. The deal is currently expected to close by the end of calendar year 2021. Until the deal closes, the parties will remain separate and independent companies.
Dr. Lisa Su is going to lead the combined company as CEO. And Xilinx President and CEO Victor Peng will join AMD as president responsible for the Xilinx business and strategic growth initiatives, effective upon closing of the transaction. Plus at least two Xilinx directors will join the AMD Board of Directors upon closing.
Credit Suisse and DBO Partners are acting as financial advisors to AMD and Latham & Watkins LLP is serving as its legal advisor. And Morgan Stanley is acting as lead financial advisor to Xilinx. BofA Securities is also acting as a financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel.
KEY QUOTES:
“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. 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.”
— AMD President and CEO Dr. Lisa Su
“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. 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 center business and enable us to pursue a broader customer base across more markets.”
— Victor Peng, Xilinx president and CEO
