In order to boost the data center business, the U.S. chipmaker Nvidia Corp announced that it would buy the Israel-based chip designer Mellanox Technologies Ltd. The deal was finalised at $6.8 billion.
Mellanox, besides making ships, makes other hardware components that are used in for cloud computing. After the end of Friday’s trading, the company had £5.9 billion market capitalization.
According to Bernstein analyst Stacy Rasgon, Nvidia has been focusing on connectivity and networking with its own customised solutions and having Mellanox work for the same would bring much more effective results.
According to reports, other chipmakers like Xilinx Inc and Intel Corp were alos bidding for the deal.
The deal has benefited Starboard Value LP, an investor, and activist from New York. Starboard owns a 5.8% stake of Mellanox.