Feb 19 1999 11:36AM EST:
>The recent weakness of the networking chip stocks (VTSS, LEVL, PMCS, etc.) has something to do with the rumors that Intel may get into the communication chip markets.
can you hook me up with my march madness picks too?
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Intel to buy Level One for $2.2 billion
By Jim Davis
Staff Writer, CNET News.com
March 4, 1999, 1:50 p.m. PT
Intel, the world's largest chipmaker, is about to get larger, announcing today that it will acquire Level One Communications for $2.2 billion in stock.
The acquisition marks a significant push by Intel to move into the fast-growing networking market, where it said it will now become a leading component supplier.
"We're continuing to look for other acquisition candidates," said Intel chief executive Craig Barrett. "We are deadly serious about our networking communications group."
Each share of Level One stock will be exchanged for 0.43 shares of Intel stock. That values Level One at $48.75 a share, an 80 percent premium to today's closing price of 27.125. Intel will issue a total of 18.6 million shares for the purchase.
Barrett said today's merger "provides us with the silicon building blocks necessary to supply the rapidly growing demands created by the Internet and e-commerce."
Level One's chips contain built-in communications features, used by network-equipment makers such as 3Com, Cisco, and Hewlett-Packard to save costs by reducing the parts in their gear.
The transaction is expected to be completed by the end of the second quarter, at which time Level One will become a wholly-owned subsidiary of Intel. Level One's 800 employees will be transferred to this subsidiary.
While the market for networking equipment continues to grow by leaps and bounds as use of the Internet expands, Intel is facing pricing pressures at the low end of the x86 processor market from Advanced Micro Devices. Today's move will help insulate Intel's profit margins in the volatile market for PC chips. |
