Intel Agrees to Buy Avago’s Networking Business for $650 Million

Intel Corp. (INTC), the world’s largest computer-chip maker, agreed to acquire Avago Technologies Ltd.’s Axxia networking business for $650 million.

Intel is paying cash for the unit, which generated $113 million in revenue last year and employs about 650 people, Singapore-based Avago said yesterday in a statement.

The purchase will help Intel provide more chips to mobile-phone service providers and expand its ability to win sales in what it predicts will be a $16 billion market, according to an online statement by Rose Schooler, a vice president of the company’s Data Center Group.

Santa Clara, California-based Intel is getting a greater proportion of its server sales from makers of networking gear and storage equipment as those industries look for ways to reduce costs by using cheaper Intel chip-based servers and depending less on expensive networking equipment.

Intel shares rose 2.9 percent to $34.10 at yesterday’s close in New York. They’ve gained 31 percent this year.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Jillian Ward, Stephen West

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