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Nvidia, in biggest deal ever, pays $6.9 billion for Israel’s Mellanox

Nvidia broke open its checkbook in a big way Monday: The Santa Clara-based graphics semiconductor giant said it will pay $6.9 billion to acquire computer interconnection technology company Mellanox.
The deal is Nvidia’s biggest-ever acquisition. Under terms of the all-cash deal, Nvidia will pay $125 a share for Israel-based Mellanox, which is a 15 percent premium on top of its Friday closing price of $109.38 a share.
Mellanox is best-known for its products that are used in high-speed Ethernet connections, and for being one of the first companies behind a technology called InfiniBand, which is used to connect supercomputers within large, hyperscale datacenters.
The companies already have a history of working together — Nvidia said its technologies support more than 250 of the 500 supercomputers around the world. Nvidia said purchasing Mellanox would improve its position in the high-performance computing market, which is seeing demand grow due to companies investing more in technologies such as artificial intelligence, data analytics and large-scale data centers.
“Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant datacenter-scale compute engine,” said Nvidia Chief Executive Jensen Huang, in a statement announcing the Mellanox acquisition.
Nvidia said it expects Mellanox to immediately add to its earnings after the deal closes, which is expected to occur by the end of the year.

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