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Intel Acquires Axxia Chip Business from Avago

Stocks in this article: INTC AVGO STX HPQ FIO SNDK ADI VSH PLXT

NEW YORK (The Deal) -- Intel (INTC - Get Report) late Wednesday said it would acquire the Axxia networking chip business from Avago Technologies (AVGO - Get Report) in a deal valued at $650 million.

The business to be acquired, which Avago bought as part of its $6.6 billion purchase of LSI earlier this year, generated sales of about $113 million in 2013 and employs 650. The purchase is part of Santa Clara, Calif.-based Intel's push to expand its business making chips for use in mobile applications.

Intel vice president Rose Schooler in a post on the company's web site said that with the purchase the company "gains a compelling product line and talented team to continue to deliver" on its goal of making chips that deliver wireless services.

The sale continues a streamlining of Singapore-based Avago following its LSI purchase. The company, a one-time unit of Hewlett-Packard (HPQ - Get Report) that was spun out in 2005, in May announced plans to sell the LSI flash business to Seagate Technology (STX - Get Report) for about $450 million in cash.

Avago bought LSI primarily to gain exposure into the enterprise storage market, and management indicated at the time the LSI deal closed that it might seek to offload certain businesses it considered non-core.

The Deal reported earlier this year that Axxia was a potential target.

The transaction, which is expected to be completed before year's end, continues a busy summer of dealmaking in the semiconductor sector. In June SanDisk (SNDK - Get Report) announced a $1.1 billion cash deal acquire Fusion-io (FIO)ON Semiconductor committed $400 million to buy Aptina Imaging and Analog Devices  (ADI - Get Report) announced a $2 billion deal to acquire Hittite Microwave.

Vishay Intertechnology  (VSH - Get Report) in July said it would buy Taiwanese chipmaker Capella Microsystems for $205 million, while PLX Technology (PLXT) was sold to Avago for $309 million.

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