Intel To Buy Networking Business From Avago For $650 Mln - Update

(RTTNews) - Intel Corp. (INTC) on Wednesday agreed to acquire LSI's Axxia Networking Business from Avago Technologies Ltd (AVGO) for $650 million in cash. The deal is part of efforts by Intel to boost its presence in the networking chip market.

The deal is expected to close in the fourth calendar quarter of 2014.

The Axxia Networking Business generated revenue of $113 million in calendar 2013 and employs about 650 people. The deal comes as Intel strives to serve the broad spectrum of corporate data centers. Intel currently supplies most of the microprocessors used in server systems.

Meanwhile Avago, based in Singapore, is divesting the Axxia Networking Business following its acquisition of LSI for about $6.6 billion. Avago expects the LSI acquisition to strengthen its position in the enterprise storage market.

Earlier, Avago agreed to sell former LSI data-storage assets to Seagate Technology (STX) for $450 million.

INTC closed Wednesday at $34.10, up $0.97 or 2.93%, on a volume of 36.3 million shares on the Nasdaq.

AVGO closed at $71.97, up $0.82 or 1.15%, on a volume of about 1 million shares on the Nasdaq.