Xilinx rockets 14% after finalizing agreement for $35 billion sale to AMD

• Xilinx shares soared as much as 14% higher on Tuesday after Advanced Micro Devices agreed to buy the company in a $35 billion deal.
• The acquisition is expected to close by the end of 2021, according to a press release. Xilinx shareholders will receive 1.7234 shares of AMD for each Xilinx share they own.
• The combined entity will boast more than 13,000 engineers and give AMD a major leg-up in the communications technology business, particularly against rival firm Intel.
• Watch Xilinx trade live here.

Xilinx surged as much as 14% on Tuesday after Advanced Micro Devices agreed to buy the chipmaker for $35 billion.

The deal is expected to close by the end of 2021, according to a press release. AMD's all-stock purchase will grant current Xilinx shareholders 1.7234 shares of AMD for each Xilinx share they own. Current AMD shareholders will own 74% of the new company, while Xilinx investors will own the remaining 26%.

The combined entity will boast more than 13,000 engineers and help both firms compete with lagging industry titan Intel. AMD also expects to unlock roughly $300 million worth of operational efficiencies through the deal over the next 18 months.

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Still, AMD shares fell as much as 4.9% in Tuesday trading.

Xilinx similarly rallied on October 9 after The Wall Street Journal first reported on the potential AMD deal. The leap placed shares at their highest point since July 2019.

The acquisition is the latest mega-deal to hit the semiconductor sector this year. It dwarfs Analog Devices' purchase of Maxim Integrated Products for $20 billion and falls just short of tying Nvidia $40 billion takeover of Arm Holdings.

Xilinx produces chips used in data centers and 5G base stations, giving AMD a major leg-up in the communications technology business. It also alleviates some concerns around future revenue. Xilinx shares tumbled through 2019 after US-China trade tensions limited shipments from Huawei. The Chinese tech giant accounts for 8% of Xilinx's revenue.

Xilinx closed at $114.55 per share on Monday, up about 17% year-to-date.

AMD closed at $82.23, up roughly 81% year-to-date.

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