According to a report published in the Calcalist financial website on Sunday citing sources, an offer to acquire Israeli chip maker Mellanox Technologies Ltd. has been made by the United States gaming and computer graphics giant Nvidia Corp. The report however did not name the source of the information.
The report claimed that the latest bid from Nvidia adds on to the list of bidders from Western countries – mostly very large tech companies, that are reportedly also trying to acquire the Israeli chip maker Yokne’am – a company that manufactures servers and storage switching solutions. Reports suggested that Microsoft, Intel Corp and US tech firm Xilinx Inc. are among the list of tech giants bidding for the Israeli firm.
Calcalist said that an offer to pay $6 billion for Mellanox has already been made by Intel. The report also estimated that the final value of the deal by Nvidia, if it goes through, would be about 10 per cent more than the current bid by Intel. Mellanox, which is a publicly listed company at the Nasdaq exchange, reportedly has a market value of about $5.9 billion. The share value of the company rose by about 51 per cent over the last one year because of speculations that the company would soon be acquired at a high value and because of the company reporting record revenues during the 2018 financial year.
The bid by Nvidia would be at an advantageous position compared to that by Intel, Calcalist said, because of the fact that such a deal would have a better potential of getting regulatory clearance from both US and Chinese regulators. This is because Intel and Mellanox control the market for InfiniBand technology which is a computer-networking communications standard that is used in high performance computers.
There were no comments made by a spokesman for Mellanox.
The revenues generated by Mellanox during the entire 2018 as reported in January, were of record proportions and exceeded the $1 billion level for the first time in the company’s history. This was driven by increasing demands for higher computation speeds for cloud platforms, AI computations and data centers by clients.
Nvidia has been operating in Israel since the last nine years as it engaged in selling of its own chips and processors locally as well as acquiring stakes in startups and construction of a research and development center in the country. The company had invested some “tens of millions of dollars” in three start-ups as of August 2018 which are Zebra Medical, a manufacturer of a medical imaging insight software that makes use of artificial intelligence, Deep Instinct, a company that predicts cyber-threats with the use of deep learning, and Rocketock, a company that is engaged in testing of simulations and chips and one that was acquired in 2016 by Cadence for a reported $40 million.
There are about 20 to 30 employees at the R&D center of Nvidia in Israel.
(Adapted from TimesofIsrael.com)