Nvidia closes in on Mellanox deal in data center push

Nvidia closes in on Mellanox deal in data center push

The $6.9B purchase price is by far the largest acquisition in Nvidia's history and Team Green beat out at least two other interested companies, Microsoft and Intel, for the purchase.

Nvidia has penned an agreement that will ultimately see it acquire the leading computing company Mellanox for $6.9 billion, or $125 a share.

Nvidia gets about a quarter of its revenue from data centres, with the $2.9 billion in sales in 2018 from the segment growing 52 percent year over year.

Nvidia has outbid Intel Corp in the auction for Mellanox and could announce a deal as early as Monday, the person said.

Nvidia's acquisition of Mellanox would also represent a win for activist hedge fund Starboard Value LP, which is a shareholder of the company and reached a deal with it past year over the composition of its board.

Mellanox gives Nvidia more entries into high performance computing and the data center.

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Nvidia has come out on top in a bidding war for chipmaker Mellanox. Nvidia and Mellanox aren't strangers; they have previously worked together on several products including the likes of the Nvidia DGX-2, as well as the #1 and #2 United States supercomputers - Summit and Sierra.

Nvidia Corp has submitted an offer to buy Israeli chip designer Mellanox, the Calcalist financial news website said on Sunday.

The move could bolster Nvidia against its chief rival in the data centre business, Intel.

NVIDIA's interest in Mellanox stemmed from its pioneering InfiniBand interconnect technology, used in many supercomputers and hyperscale datacenters.

Mellanox is based in Israel and the U.S. and the company's chips are used to power high-speed networks connecting servers. Xilinx is also a fabless semiconductor company that is apparently interested in snatching up its fellow chipmaker. "Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant datacenter-scale compute engine". The transaction has been approved by both companies' boards of directors and is expected to close by the end of CY 2019.

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