The regulator found no horizontal overlaps and vertical relationships between the operations of the two firms in EEA
Xilinx is headquartered in San Jose, California. (Credit: Xilinx)
The European Commission (EC) has approved the previously announced $35bn acquisition of Xilinx by rival US-based semiconductor company Advanced Micro Devices (AMD).
The all-stock deal, which was announced in October 2020, is aimed at creating a leading high performance computing company with an enterprise value of around $135bn.
According to the EC, the California-based Xilinx is mainly active in the supply of field programmable gate arrays (FPGAs). Last month, the company acquired Silexica, a provider of C/C++ programming and analysis tools in a move to expand its developer base.
AMD, on the other hand, is engaged in supplying central processing units (CPUs) based on the x86 instruction set, graphics processing units (GPUs), and semi-custom processors for the gaming market, noted the EC.
The Commission ruled that the proposed deal will not pave the way for any competition concerns in the European Economic Area (EEA). This is based on the lack of horizontal overlaps and vertical relationships between the operations of the two semiconductor companies, said the EC.
The regulator stated: “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.”
As per the terms of the deal, Xilinx’ shareholders will be issued 1.7234 shares of AMD for each share of Xilinx common stock.
The deal was approved by stockholders of both firms in April 2021. Subject to other regulatory approvals and conditions, the deal is expected to close by the year-end.
In the combined company, the current shareholders of AMD will have ownership of nearly 74%, while Xilinx’ stockholders will hold the remaining stake of 26%.
The enlarged semiconductor manufacturing firm will have nearly 13,000 engineers and will see more than $2.7bn of annual investment in research and development.
Recently at Computex 2021, AMD had unveiled the new AMD Radeon RX 6000M Series mobile graphics, designed for providing superior gaming performance.