U.S. Chip Giant Xilinx Said to Be Eyeing Israeli Semiconductor Maker Mellanox

If a deal takes place, a takeover price could top $100, valuing Mellanox at about $5.5 billion, two sources told CNBC

The U.S. chip giant Xilinx is seeking to acquire the Israeli semiconductor maker Mellanox, the U.S. financial news network CNBC reported Wednesday, citing unnamed sources.

CNBC said Xilinx has retained Barclays to advise it after approaching Mellanox about an offer. If a transaction does happen, it’s expected to be announced in December, sources told the network, although others said a deal is not imminent.

Shares of Mellanox, which is traded on the Nasdaq and rose more than 4% Wednesday, extended their gains Thursday, trading 0.4% higher at $93.10 at midday local time in New York. If a deal takes place, a takeover price could top $100, valuing Mellanox at about $5.5 billion, two sources told CNBC.

Xilinx and Barclays declined comment.

Mellanox, whose market cap is close to $5 billion, sells networking hardware used in data centers, including Ethernet switches and cables for connecting switches to other hardware. Buying the Israeli company would give Xilinx a broader array of products to sell into the data center market.

Two weeks ago CNBC reported that Mellanox was putting itself up for sale and had hired a financial adviser after unnamed buyers expressed an interest. Analysts at Piper Jaffray named Xilinx, Intel and Broadcom as potential buyers.

Mellanox CEO Eyal Waldman.
Ofer Vaknin