The US graphics card specialist Nvidia announced on Sunday that it would buy the Israeli chip designer Mellanox Technologies for 6.8 billion US dollars. The company outbid its competitor Intel in the auction. The deal is the giant's largest acquisition and should help the company grow its data center business.
Mellanox, based in Israel and the United States, makes chips and other hardware for cloud computing data center servers. The company had a market capitalization of about $5.9 billion as of Friday's close.
With its own tailor-made solutions, the manufacturer is increasingly focusing on networking and connectivity, and Mellanox would bring further expertise in this regard.
The data center business accounts for almost a third of Nvidia's revenue. The chip maker has been growing at a rapid pace in recent years under Chief Executive Jensen Huang, but a slowdown in China and a slowdownCryptocurrency maniahave weighed heavily on its sales in recent quarters. Fourth-quarter sales were below expectations because demand for its gaming chips was weaker in China.
The deal is expected to close by the end of 2019 and analysts do not see any regulatory hurdles. Rival Intel would have faced challenges because it, along with Mellanox, is the dominant provider of InfiniBand technology, a networking standard commonly used in supercomputers.
