Advanced Micro Devices, Inc (NASDAQ: AMD) has secured regulatory approval for Xilinx, Inc.’s (NASDAQ: XLNX) merger. United Kingdom’s Competition and Markets Authority has cleared the transaction. The European Commission has also approved the proposed merger. Advanced Micro Devices was up 1.49% in the last trading session and closed at $94.70, on a volume of 38.24 million shares. The stock is currently trading close to its 52-week high of $99.23.
While Xilinx, Inc. (NASDAQ: XLNX) closed its day at $144.56 up 1.94%, on a volume of 1.75 million shares. It is also trading close to its 52-week high of $154.93. The stock has a market capitalization of $35.54 billion.
The regulatory approvals come on Advanced Micro Devices agreeing to merge Xilinx in October 2020. Under the terms of the agreement, Thrones Merger Sub, Inc. is to merge with Xilinx. However, Xilinx will survive as a wholly-owned subsidiary of Advanced Micro Devices, Inc (NASDQ: AMD).
Completion of the merger is still subject to other closing conditions following the regulatory approvals. The transaction is still subject to certain approvals and clearances in other foreign jurisdictions.
BofA Securities analyst Vivek Arya recently reiterated a Buy rating on AMD. The analyst also raised the price target to $120 from $110, implying 28.60% upside potential to current levels.
According to the analyst, supercomputing success with a 9.8% share increase affirms Advanced Micro Devices, Inc (NASDQ: AMD) breakout potential in the Data Center business. An endorsement by Alphabet (GOOGL) is another factor that affirms the company’s prospects, according to Arya.
Arya stated, “even if supply constraints limit further CY21 revision, the improving mix towards data center could provide catch-up potential. We find valuation compelling (only semis below its 3-yr median forward PE), and at 6x CY22E EV/S a nearly 50% discount to SPX Infotech growth peers.”
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