News reports that the companies were in talks first surfaced in late March. However, those negotiations reportedly broke down in early April because Altera considered Intel's offer of $54 per share too low.
However, late last week the New York Post and other media outlets reported that talks had resumed after Altera reported disappointing financial results on April 23. Those reports were based on anonymous sources. The price of the final deal remains $54 per share.
Altera had sales of $435.5 million for the first quarter of 2015, down 6 percent compared to the year-earlier period. Net income for the quarter was also down at $94.9 million from $116.5 million.
On Monday, Intel said that by combining its chips and manufacturing processes with Altera's field-programmable gate array (FPGA) technology, it will be able to develop new products for the Internet of Things market.
Specifically, Intel plans to offer Altera's FPGA products with its Xeon processors as "highly customized, integrated products" and to improve Altera's products by applying Intel's design and manufacturing processes to them.
Altera's field-programmable gate arrays (FPGAs) can be reprogrammed to handle specific tasks and are used by companies in the medical, automotive and industrial fields.
The acquisition is expected to close within six to nine months. It has been unanimously approved by the Intel and Altera boards of directors and it's subject to certain regulatory approvals and customary closing conditions, including the approval of Altera's stockholders.
Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.