Xilinx climbs 17% on report rival AMD in talks to buy it for $ 30 billion

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  • Chipmaker Xilinx jumped 17% on Friday after the Wall Street Journal reported that Advanced Micro Devices was in talks to buy the company for more than $ 30 billion.
  • A deal could be reached as early as next week and mark the latest major acquisition in the semiconductor industry, sources told the Journal.
  • Xilinx closed Thursday with a market capitalization of nearly $ 26 billion, making the potential buyout price an attractive prospect for shareholders.
  • If the deal were to go through, it would strengthen AMD’s position in communications technology and help it better compete with rival company Intel.
  • Watch Xilinx trade live here.

Chipmaker Xilinx jumped 17% on Friday after the Wall Street Journal reported that Advanced Micro Devices was in talks to buy the company for more than $ 30 billion.

A deal could materialize as early as next week and lead to the latest major takeover in the semiconductor industry, according to the report. Still, there is no guarantee that a deal will be reached, and talks previously froze ahead of a recent restart, sources told the Journal.

Xilinx closed Thursday with a market cap of nearly $ 26 billion, making the proposed deal a compelling proposition for its shareholders. This Friday’s rally put stocks at their highest level since July 2019.

AMD shares fell as much as 3.5%. Still, stocks have risen almost 90% year-to-date as investors flooded tech stocks amid virus-fueled demand.

Read more: Fund manager Brandon Nelson will triple his benchmark in 2020 with “less discovered” companies becoming big winners. Here are 3 themes and 9 stocks he is betting on.

Xilinx produces chips for use in data centers and 5G communications base stations. Its shares fell in 2019 after trade tensions between the United States and China limited shipments by Chinese tech giant Huawei. The company accounts for up to 8% of Xilinx’s revenue.

If the merger were to go through, AMD would gain a stronger foothold in the communications technology industry and better compete with competitors like Intel.

The purchase would also be the third major semiconductor deal of the year after Analog Devices bought Maxim Integrated Products for $ 20 billion and Nvidia bought Arm Holdings for $ 40 billion.

Xilinx closed at $ 105.99 per share on Thursday.

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