Santa Clara company given green light to acquire technology group

  • 2020-04-25
Nvidia, a company based in Santa Clara, has announced that it has been given permission by Chinese authorities to proceed with a buyout.

Known worldwide for producing high-end general processing units (GPUs), cryptocurrency mining, and cloud-based processing, Nvidia now plans to buy Mellanox Technologies Ltd for $6.9m.

Mellanox is an Israel-based chip designer that produces many of the chips used in Nvidia's GPUs. This approval, given on April 16, was the last obstacle standing in the way of Nvidia completing its biggest takeover deal yet. Plans for the buyout were announced last year. GPUs can be used to aid with graphic design.

Mellanox’s share price reacted positively to the buyout. The company is on Nasdaq and its share price went up by 1.81% to $121.63 following news of the buyout. Nvidia Corp. also saw its share price rise by 4.94% on the day of the announcement to trade at $294.70.

Financial-World.org notes that the decision from the Chinese authorities to allow the buyout is a sign of goodwill between China and the United States after several joint ventures have stalled thanks to the unfriendly trade situation between the two countries.

The acquisition now allows Nvidia to source high-quality data-center technology and advanced AI chips. This merger, it is hoped, will give Nvidia a competitive edge when it comes to cloud-based processing that several other tech companies such as Amazon and Intel are venturing into.