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EU, UK clear $35bn data centre chip market mega merger

Transaction rests now on a final approval from China's SAMR enforcers, which is expected before the end of the year.

By João Marques Lima

Founder and Editor, The Tech Capital

3 Mins

July 02, 2021 | 12:03 AM BST

EU, UK clear $35bn data centre chip market mega merger

AMD CEO, Dr. Lisa Su. Source: AMD

European Union (EU) and UK antitrust regulators have given unconditional consent on the US$35 billion stock deal of Xilinx (NASDAQ: XLNX) by semiconductor designer Advanced Micro Devices Inc (AMD) (NASDAQ: AMD).

The deal, originally announced in October 2020 and approved by AMD’s shareholders this past April, is set to send shockwaves through the data centre chipset market, especially at rivals Intel (NASDAQ: INTC) – which has recently reorganised itself to better play in the field -, and Nvidia (NASDAQ: NVDA) – which is awaiting clearance for its own multi-billion Dollar acquisition of Arm.

However, AMD must still get full clearance from China’s State Administration for Market Regulation (SAMR) enforcers in order to conduct the merger as planned.

In Europe, European Commission regulators said in a statement: “The Commission concluded that the proposed transaction would raise no competition concerns in the European Economic Area given the absence of horizontal overlaps and vertical relationships between the activities of the companies.

“The Commission assessed possible conglomerate effects and concluded that the transaction does not raise competition concerns in that regard, given the lack of ability and incentive to foreclose rival providers of CPUs and GPUs and the presence of alternative suppliers. The transaction was examined under the normal merger review procedure.”

Xilinx is a global semiconductor company primarily active in the supply of field programmable gate arrays (FPGAs).

AMD is a global semiconductor company that supplies central processing units (CPUs) based on the x86 instruction set, graphics processing units (GPUs), and semi-custom processors for the gaming market.

The addressable market for the two companies is $110 billion, according to AMD. This includes not only provision of solutions to the data centre sector, but other verticals including gaming and high-performance computing (HPC).

AMD CEO, Dr. Lisa Su, said: “For several years, AMD has successfully executed our long-term growth strategy and deepened the company’s partnerships to drive high-performance computing leadership.

“The acquisition of Xilinx marks the next leg in our journey to make AMD the strategic partner of choice for the largest and most important technology companies in the world as an industry leader with the vision, talent and scale to support their future innovation.”

AMD, which has a market capitalisation of $113.37 billion, expects to close the deal before the end of 2021.

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