Analog Devices confirms Maxim Integrated all-stock deal

Marco Green
July 13, 2020

The offer values Maxim at $78.43 per share, a premium of about 22% to its Friday close and Maxim shares were up 17% at $75 in premarket trading. Analog Devices stockholders will hold roughly 69pc of the combined company, while Maxim stockholders will own the remaining 31pc.

Analog Devices Inc., based in Norwood, Massachusetts, provides technology used in everything from healthcare to transportation.

Following a lull in this sort of combinations triggered by trade stress amongst China and the US and regulatory holdups, Nvidia Corp. received approval for its acquisition of Mellanox Systems Ltd.in the Asian state in March, building new assurance that deals this kind of as the Maxim buy can go in advance.

Whereas many acquisitions and mergers have been delayed or scrapped totally resulting from COVID-19 this 12 months, the semiconductor enviornment historically has been a hotspot for buyouts.

Upon the close of the deal, which is subject to regulatory approval, two Maxim directors will join the Analog Devices board of directors, including Maxim president and CEO Tunç Doluca. Together, the two brands would have the catalogs, expertise, and resources to challenge Texas Instruments, the analog component market leader. The moment a sleepy backwater of the sector, this phase has relished a resurgence as the record of works by using and buyers has grown in recent several years. By combing forces, Analog Devices and Maxim would position themselves to handle future market headwinds better.

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It's also a very profitable area of the chip industry.

Since 2015, the Philadelphia Stock Exchange Semiconductor Index has tripled in value.

In case the discussions are fruitful, and an agreement is reached, it could lead to the biggest merger transaction in the US market in this year, which has mostly been marred by the coronavirus outbreak and the resulting slowdown. Over that same period, chip companies have been increasingly consolidating to help them lower costs and serve customers that have done the same. Their earnings have become more predictable and their cash generation has provided them with war chests and the ability to carry debt they couldn't have sustained in the past.

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