Major mergers and acquisitions (M&A) news occurred on Tuesday between two massive chip companies, and Xilinx (NASDAQ:XLNX) stock is blasting higher because of it.
Advanced Micro Devices (NASDAQ:AMD) agreed to buy Xilinx for $35 billion in stock. The deal is now official after rumors began swirling earlier this month. Importantly, both companies said they expect the deal to close by the end of 2021.
Dr. Lisa Su, president and CEO of AMD, had this to say about the deal:
“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.”
Moreover, here are a few other things to know about the deal and why XLNX stock is rising:
- The move expands AMD’s exponentially growing data centers.
- It is also beneficial to AMD’s margins, cash flow and earnings per share (EPS).
- The deal is one of the most valuable acquisitions in the chip sector’s history.
XLNX stock was up more than 10% as of Tuesday morning.
On the date of publication, Nick Clarkson did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Nick Clarkson is a web editor at InvestorPlace.