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Intel acquires Avago Networking to improve servers

Posted: 15 Aug 2014 ?? ?Print Version ?Bookmark and Share

Keywords:Axxia? Networking Business?

Intel is set to buy LSI's Axxia Networking Business and related assets for $650 million in cash. The move is expected to improve Intel's network to provide for future bandwidth demands and satisfy a growing server market.

"Adding the Axxia Networking Business capabilities to Intel's portfolio will help accelerate the company's strategy to become a leader in platform solutions for the network infrastructure," a release stated. "By providing a comprehensive product portfolio, Intel aims to help operators create a more efficient, scalable, and flexible network."

Intel's purchase will help provide more chips to handset service providers and expand sales potential, Rose Schooler, a vice president of the company's Data Center Group, wrote. Intel is making a larger portion of server sales from makers of networking gear and storage equipment looking to reduce costs by with cheaper Intel chip-based servers, Bloomberg reported.

Avago acquired LSI last year and the Networking Business will divest from its parent company. The Axxia Networking Business generated revenues of $113 million in calendar 2013 and employs approximately 650 people; officials from Avago were unavailable for comment regarding job losses.

The transaction, which has been approved by the boards of directors for both Avago and Intel, is expected to close in the fourth calendar quarter of 2014. Additional terms of the deal were not released.

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