Intel to acquire Altera for $54 a share

Intel agreed to buy Altera for $16.7 billion as the world's biggest chipmaker seeks to make up for slowing demand from the PC industry by expanding its line-up of higher-margin chips used in data centers. chips with the smaller company's programmable chips, which are used, among other things, to speed up Web-searches.

Intel said it would offer $54 per share in cash, a 10.5 percent premium to Altera's closing price on Friday.

Altera, based in San Jose, California, rejected an earlier unsolicited offer of $54 per share from Intel in April, a person familiar with the matter had told Reuters.

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The deal is the third big one in the highly fragmented chip industry this year. Avago Technologies agreed last week to buy Broadcom for $37 billion in the industry's biggest-ever takeover.