Intel to buy Altera for $16.7 billion – Washington Post

Intel has agreed to buy chip designer Altera for $ 16.7 billion, as part of a plan to expand its development of higher-margin chips used in data centers. (Reuters)

MERGERS

Intel to buy Altera

for $ 16.7 billion

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 lineup of higher-margin chips used in data centers.

By combining with Altera, Intel will be able to bundle its processing chips with the smaller company's programmable chips, which are used, among other things, to speed Web searches.

Intel said Monday that it would offer $ 54 per share for San Jose-based Altera, a 10.5 percent premium to Altera's close Friday. The deal price is unchanged from Intel's unsolicited offer that Altera had rejected in April, according to people familiar with the decision.

The integration of Altera's chips with Intel's will create a new class of products giving customers a significant improvement in performance, lower costs and a lot more flexibility, Intel Chief Financial Officer Stacy Smith told Reuters. "That's the piece that's pretty exciting about it."

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

The deal is Intel's biggest ever, outstripping its $ 7.7 billion acquisition of security software maker McAfee in 2011.

— Reuters

AUTOMOTIVE

Takata urges change in air-bag inflators

Takata is encouraging automakers to replace defective air-bag inflators with newly designed ones from the company, or with those made by competitors that don't include a volatile chemical, a top executive said.

Kevin Kennedy, executive vice president of North America for Takata, will tell Congress on Tuesday that the company "deeply" regrets every rupture episode involving its air bags, especially those causing injury or death. Kennedy said in written testimony for a House hearing that the percentage of air-bag inflators likely to have a problem is "extremely small" but that Takata is replacing all of them.

The company has declared 33.8 million air bags defective in an agreement with U.S. regulators. It's the biggest auto-safety recall in U.S. history.

Takata uses the chemical ammonium nitrate to inflate the air bags. It can explode with too much force, blowing apart a metal inflator and sending shrapnel into the passenger compartment.

In replacing many faulty air bags, Takata is looking to make air-bag inflators with a new design that use ammonium nitrate, or to use inflators made by rival suppliers that don't use the chemical, Kennedy said.

Half of the replacements that Takata shipped to automakers last month had inflators made by its competitors, Kennedy said. By year's end, he said, that is expected to reach about 70 percent.

— Associated Press

Also in Business

● Walt Disney's chief financial officer, Jay Rasulo, will resign at the end of June, clearing the path for another top executive, Tom Staggs, to eventually succeed Bob Iger as chief executive. The company did not immediately name a new chief financial officer, but Rasulo, 59, will serve as an adviser to assist in the transition. Iger is to step down in 2018, having postponed his retirement twice.

● A unanimous Supreme Court ruled that homeowners who declare bankruptcy can't void a second mortgage even if the home isn't worth what they owe on the primary mortgage. The justices ruled in two Florida cases that bankrupt homeowners can't "strip off" a second loan even if they are underwater on the first loan. Both cases involved property owners who were allowed by lower courts to nullify second loans held by Bank of America. The U.S. Court of Appeals for the 11th Circuit in Atlanta affirmed both cases, but Bank of America said the rulings conflicted with Supreme Court precedent.

● Google said 21 percent of tech hires last year were women, boosting the overall number of women in technical roles by 1 percent, as part of efforts to increase diversity. Google said the increase in African American and Hispanic employees outpaced the company's overall hiring growth, but made up only 2 percent and 3 percent, respectively, of the total workforce.

● The price of a private lunch with Warren Buffett is more than $ 1 million in an online auction that continues all week. The top bid Monday afternoon was $ 1,000,100, so the California charity that will receive the proceeds is guaranteed another significant donation. Through the annual auctions, the chairman and chief executive of Berkshire Hathaway has raised $ 17.9 million for the Glide Foundation, which provides social services to the poor and homeless in San Francisco. Last year's auction winner paid $ 2,166,766, but the 2012 auction set a record with its $ 3,456,789 winning bid.●

— From news services

Coming Today

● Daylong: Motor-vehicle sales for May.

● 10 a.m.: Factory orders for April.

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