Intel has acquired Axxia Networking Business for $650 million

Intel has scooped up the LSI Axxia networking chip business from Avago Technologies for $650 million in cash. Intel announced the acquisition on Wednesday, which sees it acquire Axxia Networking Business’ ARM and PowerPC-based processors destined for enterprise and wireless network hardware. Intel is still highly dependent on the uncertain PC market and has struggled to gain traction in mobile, while its other core units serving the enterprise, such as the datacentre and Internet of Things groups, have fared markedly better.

Six hundred and fifty million dollars — all in cash. That’s the amount Intel has agreed to pony up for Avago Technologies LSI’s Axxia Networking Business. Intel is paying cash for the assets. The two are still cementing the deal, but it has been approved by the boards of both companies. Pending government regulatory approval, the two sides hope to have the deal in the can by the end of the fourth quarter. Avago, which produces semiconductors, acquired LSI late last year for $6.6 billion in cash. This deal means Avago is divesting itself of LSI’s Networking Business, which generated over $110 million last year. LSI’s Networking Business employs more than 600. Avago bought LSI to buttress its presence in cloud-based services and the mobile ecosystem. A blog post from Rose Schooler analyzing the deal and what it portends for Intel’s Data Stack put it this way: “The opportunity here is significant and wireless access is a critical component of the mobile network, which is part of a growing network market segment estimated to represent a $16 billion silicon market segment. The acquisition of the Axxia Networking Business will further help Intel realize our vision of transforming wireless access into an intelligent, flexible network based on standard building blocks to fuel innovation and increase network efficiencies.”