AMD acquires Xilinx, reinforcing its business of chips for data centers and its position relative to competition with Intel. Companies expect that the deal will save $300 million annually. AMD also reported a jump in revenue growth of the 3rd quarter 55%.
On Tuesday Advanced Micro Devices (AMD) announced the signing of an agreement to purchase competitor Xilinx (XLNX) as part of the deal with shares worth $35 billion, and reported strong financial results for the 3rd quarter of 2020.
AMD share, an increase of 134% over the past 12 months, on Tuesday fell more than 5% (at the time of writing), at the close of trading, a decline of 4.07%.
Shares of Xilinx, increased by 20.7% over the past 12 months, on Tuesday during trading rose by 9%, peaking in the last 52 weeks, closed with a growth of 7.3%.
Under the deal shareholders will receive 1,7234 Xilinx common stock of AMD for each ordinary share Xilinx, the Xilinx cost will be $143 per share, which is about 24.8 per cent higher than the price at the close of trading on October 26 at $114,55.
Following the transaction, AMD will own 74 percent the combined company, and stockholders Xilinx will own the remaining 26%.
The transaction is subject to approval of shareholders and regulators. It is expected that the merger will be completed by the end of 2021.
AMD CEO Lisa su will lead the combined company as CEO, and CEO of Xilinx, Victor Peng will remain responsible for business Xilinx and initiatives for strategic growth. Companies expect that the deal will save $300 million annually.
Commenting on the deal, Lisa su said, “It really is a compelling combination that will create significant value for all stakeholders, including shareholders, AMD and Xilinx, which will benefit from future growth and potential growth of the combined company”.
Gene. the Director of Xilinx Peng said that the meeting between the two companies has already shown that they have very similar methods of development of chips.
In its report last week, Xilinx announced that revenue for the sale of products for data centers surged by 23%, which increased their share in the total income of the company to 14% from 12% a year ago.
The Association of AMD with Xilinx will strengthen their promising and fast-growing business the production of chips for data centers and allow you to compete at a new level with Intel (INTC).
AMD claims that the deal will increase its total addressable market to $110 billion.
The end of the 3rd quarter, AMD has surpassed estimates of Wall Street
AMD reported an increase in earnings per share, up $0.41, compared to of $0.18 in the same quarter of last year, it was above average analytical estimates of $0.35. The sum of quarterly earnings (net income) increased to $501 million, compared with $219 million a year ago and $216 million in the previous quarter.
Income rose 56% to $2.8 billion (from $1.8 billion in the previous year) and exceeded the analysts ‘ forecast of $2.56 billion to See the quarterly history of revenue and profits for AMD for the last 2 years can link.
Revenue from AMD, which includes sale of the Central and graphics processors, amounted to $1.67 billion, beating estimates of $1.55 billion
Revenue products for data centers, including sales of server chips EPYC increased by 116% (compared to the same period last year) to $1.13 billion and 101% compared with the previous quarter.
Forward-looking statements AMD
In the fourth quarter of 2020 AMD expects revenues of approximately $3.0 billion plus or minus $100 million, which is 41% more compared to the same period last year and 7% compared to the 3rd quarter.
The amount of income for the entire 2020, according to the forecast of AMD will increase by about 41% compared to the year 2019, which is higher compared to the previous forecast of 32% growth.