Mellanox has a market cap of just under $5 billion. Xilinx has a market cap of $22 billion.
It is said that Xilinx will have to pay $100 a share – around $5.5 billion – to buy the company.
Mellanox makes kit for data centres and Xilinx is targeting data centres with a new processor called ACAP which matches a data centre’s workload to its processing requirement in order to minimise power usage.
A deal, if it happens, is expected to be announced next month.
Xilinx has hired Barclays to pursue the transaction.