The Wall Street Journal: Intel nears agreement to buy Altera for about $54 a share

Intel Corp.’s logo.

Intel Corp.’s on-again-off-again attempt to buy Altera Corp. is on the cusp of succeeding, as the chip maker prepares to announce the roughly $17 billion acquisition Monday, a move that would allow it to boost revenue and help defend a key business.

Altera ALTR, +4.00%  stockholders will receive about $54 a share, people familiar with the matter said, around the price the company rejected in April in an earlier round of negotiations.

There is, as always, a chance the deal could fall apart at the last minute.

The expected price is 56% higher than the one at which Altera traded before The Wall Street Journal first reported talks between the companies on March 27. Altera’s shares closed Friday at $48.85.

Intel’s INTC, +1.32%  bid continues a consolidation wave in the semiconductor industry, as companies search for new sources of revenue growth and target chip makers finding it hard to boost profitability on their own. Avago Technologies Ltd. AVGO, +4.00%  on Thursday announced a $37 billion deal to buy Broadcom Corp., BRCM, +1.07%  the largest technology acquisition on record.

The companies in the latest transaction are already partners. Intel’s factories churn out some high-end semiconductors for Altera, which designs chips but turns to external manufacturers to make them.

Intel, the kingpin of processor chips, is expected to use the smaller company’s line of programmable chips to get revenue growth at a time when a slowdown in personal-computer demand is crimping its own growth.

An expanded version of this report appears on WSJ.com

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