For each share of Xilinx, its holders receive approximately 1.7 shares of AMD. The resulting share price of $ 143 is approximately 24.8 percent higher than the closing price of Xilinx shares on October 26. AMD shareholders will hold 74 percent of the company, while Xilinx shares will hold the remaining 26 percent.
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AMD’s market value now exceeds $ 96 billion, with the company’s stock price up about 79 percent since the beginning of this year. The covid-19 pandemic has increased demand for personal computers, game consoles and other devices that use AMD chips.
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It was the strong rise in AMD’s share price that probably convinced the company to finance the acquisition with its shares, wrote The Wall Street Journal. The market value of Xilinx is now around $ 28 billion.
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Shares of AMD fell about four percent before trading, while shares of Xilinx gained more than 12 percent after the transaction was announced.
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AMD manufactures chips for desktop and laptop computers as well as for gaming devices such as the Xbox and PlayStation. Xilinx chips are used in wireless communications, data centers, and industries such as the automotive industry.
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AMD’s acquisition of Xilinx will help it compete with the larger rival Intel and secure a stronger position in the fast-growing markets for chips for the telecommunications and armaments industries.
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