The offer price of US$125 per share represents a premium of 14 percent to Mellanox's Friday close.Mellanox, based in Israel and the United States, makes chips and other hardware for data center servers that power cloud computing. The company had a market capitalization of about US$5.9 billion at the end of trading on Friday.
The deal is being announced after a competitive bidding process where other chipmakers such as Intel Corp and Xilinx Inc also bid for it, according to sources familiar with the matter. Reuters reported about the deal on Sunday.The acquisition is a win for the New York-based activist investor Starboard Value LP, which owns a 5.8 percent stake and had reached a deal with Mellanox last year over the composition of its board.
Data center revenue accounts for nearly a third of Nvidia's sales. The chipmaker has grown at a rapid pace in the past few years under CEO Jensen Huang, but a slowdown in China and a fading cryptocurrency craze have started to weigh on its sales in recent quarters.