AMD's Tuesday announcement details a definitive agreement between itself and Xilinx, with the former purchasing the latter in an all-stock deal. According to the deal's terms, Xilinx shareholders will receive 1.7234 shares of AMD common stock for each share of Xilinx stock in their possession. Xilinx's shareholders are expected to hold just over a quarter of AMD's outstanding shares after the deal closes. AMD expects that the deal will be "immediately accretive to AMD margins, EPS and free cash flow generation and deliver industry-leading growth."
The acquisition of Xilinx by AMD mirrors a similar move by Intel
AMD's President and CEO, Dr. Lisa Su, seemed to agree with that sentiment, stating, "Our acquisition of Xilinx marks the next leg in our journey to establish AMD as the industry's high performance computing leader and partner of choice for the largest and most important technology companies in the world. This is truly a compelling combination that will create significant value for all stakeholders, including AMD and Xilinx shareholders who will benefit from the future growth and upside potential of the combined company."
News of the deal didn't seem to affect AMD's stock, though the news coincided with a volatile day of trading marked by major indices tumbling for another consecutive day.