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April 16, 2020updated 17 Apr 2020 9:01am

NVIDIA’s Mellanox Buyout (Finally) Gets Chinese Approval

Deal set to go ahead after 13-month wait

By CBR Staff Writer

UPDATED April 17 with NVIDIA’s confirmation, comment.

NVIDIA’s $6.9 billion buyout of Israel’s Mellanox has been approved by China’s competition and mergers watchdog, clearing the all-cash deal to go ahead over a year after it was first announced on March 11, 2019.

Mellanox sells products from cables to its system-on-chip family BlueField; it specialises in Ethernet and InfiniBand-based data centre networking. (Both FPGA specialist Xilinx and Microsoft had been linked with a potential deal before NVIDIA swooped, as had Intel; the reports were never fully substantiated).

As reported by markets news site Seeking Alpha today, citing a Chinese language page, “the conditions only require the companies to not add bundles or other ‘unreasonable’ requirements when selling devices in China.”

The acquisition will boost NVIDIA’s growing push into the global data centre market, adding Mellanox interconnects to NVIDIA’s GPUs in a combined portfolio that already reaches the majority of hyperscale data centres.

European regulators had signed off the buyout in December.

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Mellanox has been busy during the wait for sign-off, in March buying privately held security and network intelligence startup Titan IC, based in Northern Ireland.

Titan provides an engine high-speed complex pattern matching, real-time Internet traffic inspection and the detection of strings, keywords and malware using regular expressions (RegEx).

Mellanox had already been a Titan IC partner and indeed licensed its technology for use in its BlueField family of advanced SmartNICs and I/O Processing Units (IPU) solutions. Mellanox said the buyout will allow the company to “innovate across software-hardware boundaries”.

NVIDIA still has cash to hand. It reported full year revenues for 2020 of $10.9 billion, down seven percent on the previous year. On January 26, it had cash, cash equivalents and marketable s2ecurities to hand of $10.8 billion.

Late April 16, NVIDIA confirmed it has received approval from all necessary authorities to proceed with its planned acquisition of Mellanox…

“The latest approval by China’s State Administration for Market Regulation follows antitrust approval from the European Commission and Mexico and the expiration of the waiting period under U.S. antitrust laws. With the exception of the remaining customary closing conditions, all conditions to the deal’s closing have been satisfied.

“The acquisition is expected to be immediately accretive to NVIDIA’s non-GAAP gross margin, non-GAAP EPS and free cash flow. Closing is expected to occur on or about April 27, 2020”, the company added.

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