Update at 10:36 am EST
Xilinx (XLNX) shares surged higher Thursday regulators in China conditionally approved its $35 takeover by Advanced Micro Devices (AMD).
China's State Administration for Market Regulation gave its nod to the deal, first unveiled in October of 2020, on Thursday, provided the groups agree not to force so-called 'tie-in' sales nor discriminate against customers that mix-and-match semiconductor purchases. It also wants Xilinx to make sure its chips work seamlessly with existing products in the Chinese economy.
European regulators cleared the deal in July of last year.
Xilinx's data-center chips have become much more valuable in the wake of the global pandemic, triggered in part by a surge in work-from-home dynamics that have pressured companies around the world to improve their technology and storage capabilities.
Xilinx posted record sales of just over $1 billion in the the three months ending in December, its fiscal third quarter, adding late Wednesday that its bottom line came in at a Street-beating $1.29 per share.
“Xilinx achieved another record quarter and surpassed $1 billion in quarterly sales for the first time in the company’s history,” said CEO Victor Peng. “While we were unable to fully satisfy customer needs, our results demonstrate our team’s relentless focus and execution in supporting our customers as well as possible given the extremely tight supply conditions.
Xilinx shares were marked 3.75% higher in early trading Thursday to change hands at $181.86 each. AMD, meanwhile, fell 2.7% to $107.67 each.
AMD CEO Lisa Su told investors in October that the pair were making "good progress" on the regulatory approvals, but hoped to have it closed by the end of 2021. AMD noted in a Securities and Exchange Commission filing Thursday that the deal is now expected to close by the end of the current quarter.
"The Xilinx acquisition provides significant benefits to AMD, including expanding our product portfolio with leadership adaptive computing and AI solutions and further diversifying our customer base into complementary markets, including wired and wireless communications, industrial and automotive," she said.
TheStreet's founder, Jim Cramer, thought Xilinx might be a reluctant seller at the time the deal was announced, given that it feels it's on a 'launch pad' to growth, and wondered if Su would be concerned about overpaying for a company that might not fit into AMD's core areas.
