Following the recent reports, Intel on Monday announced that it has agreed to buy Altera for $54 per share in an all-cash transaction valued at approximately $16.7 billion. The acquisition will couple Intel’s products and manufacturing process with Altera’s field-programmable gate array (FPGA) technology. The combination is expected to enable new classes of products for the data center and Internet of Things (IoT) market segments. Intel plans to offer Altera’s FPGA products with Intel Xeon processors as customized, integrated products. The companies also expect to enhance Altera’s products through design and manufacturing improvements resulting from Intel’s integrated device manufacturing model.

"Intel’s growth strategy is to expand our core assets into profitable, complementary market segments," said Brian Krzanich, CEO of Intel. "With this acquisition, we will harness the power of Moore’s Law to make the next generation of solutions not just better, but able to do more. Whether to enable new growth in the network, large cloud data centers or IoT segments, our customers expect better performance at lower costs. This is the promise of Moore’s Law and it’s the innovation enabled by Intel and Altera joining forces. We look forward to working with the talented team at Altera to deliver this value to our customers and stockholders."

Altera will become an Intel business unit to facilitate continuity of existing and new customer sales and support. Intel plans to continue support and development for Altera’s ARM-based and power management product lines.

The companies said they expected the deal to closed in six to nine months.