Share this article Share Share IBM’s deal to buy chip maker Sharpe, which is being developed by Intel and ARM, is a major step forward for Intel and the chip maker’s future.
Shares in Sharpe rose more than 7 per cent on Thursday morning, the biggest rise in more than four years.
The shares were trading at a premium to the $6.65 billion that Intel paid for the company in July 2015.
Sharpe, a company that was founded in 1984 and has a market value of more than $30 billion, has developed a range of chips that have been used in personal computers and mobile phones.
Intel’s chip maker has been struggling to keep up with its rivals.
Intel’s share price has risen more than 5 per cent since January, when the takeover was announced.
Sharpe was valued at more than three times its current market value at the time of the deal.
The company had been valued at $7.5 billion at the close of trading on Thursday.
The deal will help Intel make further acquisitions of chip makers and bring new jobs to the US, said John Cogan, a partner at law firm Covington & Bacon in Washington.
“The combination of Intel’s acquisition of Sharpe and Intel’s efforts to expand its business in the US should further support the chip giant’s plans to compete in the burgeoning global chip industry,” Cogan said.
“Sharpe is an important example of a company with strong growth potential that Intel is investing in and will look to build upon.”
Sharpe has a strong product pipeline that has grown to include the Intel Atom processors that power the world’s most popular mobile phones, the Apple iPhone 5s and the Samsung Galaxy S5.