Intel Reportedly Offering Up To $6B To Buy Mellanox

Intel is reportedly offering up to $6 billion to acquire Mellanox, a data center solutions vendor that has already received interest from Microsoft and Xilinx.

Multiple Israeli news outlets reported the news, pinning Intel's offer between $5.5 billion and $6 billion in cash and stock. At the high end, it would represent a 35 percent premium on Mellanox's stock price on Tuesday market close, which was $81.67 per share. The offer, which was made in recent months, is still open, Calcalist reported.

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Mellanox's stock price rose as much as 8 percent on Wednesday morning.

Intel and Mellanox did not respond to a request for comment by press time. The two companies declined to comment on Calcalist's story.

Intel was previously named as a potential buy among Xilinx and Broadcom in a note written by Piper Jaffray analysts in October. CNBC reported in November that Xilinx, which competes with Intel in data center specialty chips, was reportedly offering $5.5 billion for Mellanox. A month later, Microsoft emerged as another potential buyer after hiring Goldman Sachs to negotiate a deal.

After Mellanox hired a new CFO at the beginning of the year, Piper Jaffray analysts said that the company was likely no longer selling itself but didn't rule out the possibility entirely.

A competitor and customer of Intel, Mellanox sells a variety of data center products ranging from ethernet switches, chips and InfiniBand intelligent interconnect solutions to servers, storage and hyper-converged infrastructure. It received a 5-star rating in CRN's 2018 Partner Program Guide.

Last June, Mellanox, based in Israel, appointed three new board members in a settlement with activist investment firm Starboard Value after the firm threatened to oust all sitting directors.

Intel's reported offer to Mellanox comes as the Santa Clara, Calif.-based semiconductor giant is expecting a slowdown in data center growth, largely due to lower demand from cloud service providers and Chinese customers. The company said it expects growth to pick up again in mid-2019.