What's Going On With AMD's Acquisition of Xilinx?

The merger between AMD (NASDAQ: AMD) and Xilinx (NASDAQ: XLNX) has been a long time coming. AMD had previously said it foresaw its acquisition being complete by the end of 2021. But here we are in 2022, and the deal is still pending. In this Motley Fool Live segment from "Semiconductor Revolution" recorded on Jan. 6, contributors Jose Najarro, Nicholas Rossolillo, and Billy Duberstein discuss what's going on.

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Jose Najarro: The first one I want to talk about is AMD's acquisition. At the end of the year, I believe it was Dec. 30, AMD announced that they originally were expected to close their acquisition with Xilinx at the end of quarter four of 2021. But due to them requiring a few approvals, it's been pushed to quarter one of 2022. Nick, I know you follow this, and I think it was the last episode we did that you might have mentioned a little bit about AMD and Xilinx. Any thoughts on this push?

Nicholas Rossolillo: Yeah. It's not terribly surprising given the size of this deal. Xilinx is a big company as well. It's a big merger. The hang-up is China. Chinese regulators have not signed off on it yet. Everyone else has signed off on it: the U.S., the European Union, the U.K. They're just waiting on China to do final sign-off for that to go through.

Billy Duberstein: I give it 50/50 that happens. With a couple of big tech acquisitions in recent years. Sometimes, what Chinese regulators will do is that they will just not sign off on it but not reject it. Then the clock will run out and the acquisition will be nixed. I think Applied Materials had an acquisition that got canceled that way. I think when Qualcomm tried to buy NXP, that happened as well. That seems to be the M.O. of the Chinese government, or their regulators right now. China's cracking down on its own tech sector and breaking big companies up. I'm skeptical this is actually going to go through, but it could happen.

Jose Najarro: I mean, it does seem like overall, the market is not too fearful at the moment. AMD's stock price, I don't think has taken a huge hit. Maybe I could be wrong. I don't know, right at the moment, I think Xilinx might have taken a little bit bigger hit than AMD, but both of them are still moving China along. But definitely, it's probably as we get closer and who knows, maybe they might push to another -- extend it little bit more. That fearness might show a little bit more in the stock price.

Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned.Jose Najarro owns Advanced Micro Devices. Nicholas Rossolillo owns Advanced Micro Devices and Xilinx. His clients may own shares of the companies mentioned. The Motley Fool owns and recommends Advanced Micro Devices. The Motley Fool recommends Xilinx. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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