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Official: AMD will team up with Xilinx without spending a cent
When Xilinx recently reported its quarterly results, management declined to comment on rumors of an upcoming AMD deal. But AMD itself before the publication of its quarterly report confirmed that the deal will take place. The companies will exchange shares, the deal is scheduled to be completed by the end of next year.
Image source: AMD
The value of assets that will come under AMD control is indeed estimated at $ 35 billion, as discussed at the level of rumors. Another thing is that AMD will not need to resort to borrowing to complete the deal. The parties simply agreed to exchange shares at the rate of 1.7234 AMD shares per Xilinx share. When the swap takes place, AMD’s current shareholders will control approximately 74 percent of the combined company, with 26 percent going to Xilinx shareholders. From the point of view of American law, the transaction will be held as a reorganization that does not require tax payments.
The total capitalization of the combined company will reach $ 135 billion, and AMD estimates the total market capacity at $ 110 billion. Xilinx Programmable Arrays Expected to Be Used in Server Solutions Promoted by AMD. Lisa Su will continue to lead the merged company, the board of directors will include two representatives from Xilinx, and the current head of this company, Victor Peng, will take the status of AMD president in charge of core business. A year and a half after the closing of the deal, AMD expects to reduce operating expenses by $ 300 million per year by optimizing the activities of the combined companies. AMD and Xilinx will remain independent companies until the end of the deal at the end of 2021.