Intel close to buy chip producer Altera for $15 bn

The price could be for as much as $54 per share, or a 15% premium over Altera’s Thursday closing price of $46,97.

The deal, if consummated, would be the biggest acquisition ever for the $160 billion market cap Intel — and help it move from PC sales into faster-growing sectors like Altera’s data center programmable chips.

Altera reportedly rejected an Intel $54 bid just a few months ago and then broke off sales talks, but that was before Altera issued disappointing earnings.

“A deal is likely by the end of next week,” according to a source, who also cautioned that the talks could still fall apart.

Altera shares were trading around $35 in March before talk of a possible deal leaked.

Intel is not interested in making a counterbid against Avago Technologies for Broadcom, sources said. Avago agreed Thursday to pay $37 billion for Broadcom.

“A year ago it made sense for Intel to buy Broadcom when it was $25 a share, but not at $60,” said Stacy Rasgon, a senior analyst at Bernstein Research.

Further evidence Intel is not planning to buy Broadcom is that its banker on the Altera acquisition, JPMorgan’s Kurt Simon, is also Broadcom’s sell-side banker, so Intel likely was aware of the Broadcom opportunity, a source said.

Broadcom’s founders have a 47 percent voting stake and will have meaningful roles at Avago. Henry Samueli, for example, will be chief technology officer at the combined company.

The founders would likely feel less comfortable becoming part of Intel, a source said.

Intel’s largest acquisition to date was an $8 billion 2010 pickup of security company McAfee that as of now has not produced clear benefits, Rasgon said.

Altera and Intel declined comment.