Nvidia potential acquisition of Mellanox Technologies would be its biggest ever

As per a source Nvidia has outbid Intel Corp for Mellanox. The deal assumes strategic importance since it will reduce Nvidia’s dependency on the gaming industry for its revenues.

As per a source familiar with the matter at hand, Nvidia Corp is close to acquiring Mellanox Technologies Ltd for more than $7 billion.

The potential all-cash deal would be Nvidia’s biggest-ever acquisition and boost its business of making chips for data centers. The potential deal will also diminish Nvidia’s dependency on the video game industry for revenue, an industry where it is best known as a major technology vendor.

As per the source, Nvidia has outbid Intel Corp in the auction for Mellanox. An announcement on the deal could potentially come later today.

The source preferred the cover of anonymity since the negotiations are confidential.

Neither Mellanox nor Intel immediately respond to requests for comment. Nvidia declined to comment.

As of last Friday’s close, Mellanox’s market capitalization was around $5.9 billion. The company, based in Israel and the U.S., makes chips for high-speed networks.

For Nvidia, revenues from data center accounts for nearly a third of its sales. Under CEO Jensen Huang, Santa Clara, California-based Nvidia has grown at a rapid pace; however a slowdown in China and a fall in the craze for cryptocurrencies have weighed on its sales in recent quarters.

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