Investors like the sound of this: according to a report by the Wall Street Journal,
A San Jose-based semiconductor company with a $10 billion market cap prior to the news breaking -- that number is now $13.4 billion -- Altera makes programmable logic devices that can be used in everything from network routers to a car's navigation system, and recorded $1.9 billion in sales during 2014.
If the deal comes to fruition, it would be Intel's largest purchase ever. The company's last big acquisition was in 2011, when it bought security company McAfee for $7.68 billion in cash.
Intel declined to comment on Friday's report; Altera did not immediately respond to a FORBES request for comment.
For Intel, a deal may help the company keep pace in the quickly-consolidating semiconductor and microchip sector, while also creating a new way for CEO Brian Krzanich to increase the company’s top and bottom line. While Intel’s adjusted EPS rose 22% in 2014 to $2.30 -- Krzanich's first full year at the head of Intel -- that figure reflected a decline in per share profits since the end of 2011. Analysts polled by
In early March, NXP semiconductors said it would buy competitor Freescale Semiconductors in a cash and stock deal valued at $11.8 billion. NXP said its Freescale takeover would drive an estimated $200 million of cost synergies in the first full calendar year after the close of the merger and forecast a path towards $500 million in annual synergies. Those synergy forecasts have propelled NXP’s shares, which have risen over 17% in the past month.
Collaboration between Intel and Altera is not without precedent: in 2013, Altera announced that it would use Intel technology in the manufacturing of a type of chip used for everything from cloud computing to storage applications.
"We look forward to collaborating with Altera on manufacturing leading-edge [microchips], leveraging Intel's leadership in process technology," Krzanich, then Intel's chief operating officer, said at the time.
-- with reporting from Antoine Gara
