Mellanox-Nvidia merger spread widens

Eyal Waldman and Jensen Huang Photo: Kadia Levy

As trade tensions between the US and China escalate, there is growing concern among investors that the Chinese regulator will not approve the deal, as Mellanox share price falls.

As the trade war between the US and China escalates, the merger spread on the $6.9 billion acquisition of Israeli big data connectivity company Mellanox Technologies Ltd. (Nasdaq:MLNX) by Nvidia has widened to 16.5%, according to StreetInsider data.

Nvidia is committed to completing the deal by the end of the year and paying $125 per Mellanox share but on Friday trading on Wall Street the Israeli company's share price fell 1.83% to $106.48, its lowest price yet since the deal was announced in March.

The fall followed tweets by US President Donald Trump threatening more tariffs on Chinese goods and even the possibility of ordering US companies out of China. The deal needs approval by the Chinese regulator and there is now very real concern that that will not be forthcoming.

According to StreetInsider data, since the deal was announced in March, the spread has averaged 9.7% but with the renewed trade tensions it is now heading towards double that average.

Published by Globes, Israel business news - en.globes.co.il - on August 25, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Eyal Waldman and Jensen Huang Photo: Kadia Levy
Eyal Waldman and Jensen Huang Photo: Kadia Levy
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