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Intel will possibly acquire NVIDIA

Reuters speculates Intel is set to acquire NVIDIA. The speculation arose when NVIDIA’s shares rose 8% to $30.62 on the NASDAQ. Approximately 20 million shares were traded according to Reuters. Intel representatives declined to comment while NVIDIA representatives were unavailable. Bill Lefkowitz, options strategist, vFinance Investments believes Intel will make the announcement tonight.

This is still speculation at the moment as NVIDIA was deemed too expensive to purchase.The article claims:

Some observers said that they doubt Intel would buy NVIDIA because it's too expensive. The company has a stock market capitalization of about $10 billion, which means it would demand a far higher price than what AMD is paying for ATI.

Nevertheless, if the acquisition were to happen it would be interesting to see what Intel has in store for NVIDIA, as Intel holds the majority of the graphics market.  Intel’s primary competitor, AMD, previously acquired ATI Technologies -- NVIDIA’s primary competitor. The proposed AMD and ATI merger is nearing its final stages at the moment.


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RE: PFFFF
By SexyK on 10/4/2006 11:53:40 PM , Rating: 5
Looking at market cap, INTC is worth ~$120B while NVDA is ~$10B. On the other hand, AMD is worth around ~$12B and ATYT is worth around ~$5.5B. So intel would have to shell out ~1/12 of its value for nVidia while AMD is paying almost 1/2 of it's value for ATI.

Compared to the AMD/ATI deal, this is a drop in the bucket for Intel.


RE: PFFFF
By kamel5547 on 10/5/2006 12:08:53 AM , Rating: 5
Well... the bid would have to be a premium (30% maybe) to the current stock price, but it is well within Intels reach. The real question would would someone else bid against Intel (private equity maybe?). Owning the only independent video card firm would probably give people leverage in the industry...

The question also is would regulators allow it given Intels much stronger competitive position. Ic ould see the deal having troubles in Europe, Japan etc. where they are already in hot water over antitrust issues.


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