Analog Devices to Buy Rival Maxim for Over $20 Billion
13 Julho 2020 - 9:37AM
Dow Jones News
By Cara Lombardo
Semiconductor maker Analog Devices Inc. said Monday that it
plans to buy rival Maxim Integrated Products Inc. for more than $20
billion in what would be one of the largest merger deals of the
year.
The all-stock deal would create a combined company valued at
around $68 billion.
Maxim shareholders would receive about .63 shares of Analog
stock for each Maxim share and own about 31% of the combined
company. Maxim's market value was roughly $17 billion as of
Friday's close.
The Wall Street Journal first reported Sunday that the two
companies were nearing such a deal.
There has been a flurry of activity in the semiconductor
industry as chip makers seek scale and expand their product
portfolios in a world in which everyday items from cars to washing
machines are increasingly incorporating chips to link to the
internet.
Maxim's semiconductors are used in a variety of settings
including industrial, automotive and health care. The company was
founded in 1983 and is based in San Jose, Calif.
Analog, with a market value of roughly $46 billion, is based in
Norwood, Mass. The companies have held talks on and off for
years.
Both Maxim and Analog are major players in analog
semiconductors, used in areas such as power management for
automotive batteries. A combination of the two would create a more
muscular competitor to Texas Instruments Inc., the leader in analog
semiconductors with a $119 billion market value. Analog would also
gain access to Maxim's army of hardware engineers.
It would be the largest U.S. merger so far this year and one of
the largest globally, according to data from Dealogic. Deal volume
world-wide dropped off beginning in mid-March as fallout from the
coronavirus pandemic prompted many companies to put merger
aspirations on hold, but it has recently shown signs of coming back
to life. A blank-check company plans to buy health-care-services
provider MultiPlan in a deal worth roughly $11 billion including
debt, the Journal also reported Sunday.
Still, merger volume is down roughly 50% globally so far in 2020
in dollar terms compared with last year.
The chip sector has been a reliable source of deals for years. A
little over a year ago, German chip maker Infineon Technologies AG
agreed to buy Cypress Semiconductor Corp. for 8.4 billion euros
(about $9.4 billion). Underscoring the complex regulatory scrutiny
inherent to semiconductor deals, that deal just closed in
April.
Also last year, NXP Semiconductors NV agreed to acquire Marvell
Technology Group Ltd.'s suite of Wi-Fi and Bluetooth connectivity
technology and On Semiconductor Corp. struck a $1.1 billion deal
for Quantenna Communications Inc.
U.S. and Chinese authorities have stood in the way of some
semiconductor deals. In 2018, Qualcomm Inc. scrapped its $44
billion deal for NXP when it failed to win Chinese approval almost
two years after it was first announced even though the transaction
didn't involve a Chinese company.
Broadcom Inc., historically known for semiconductors that go
into cellphones and networking equipment, in recent years has
shifted into software acquisitions after it was thwarted in an
effort to buy Qualcomm for more than $100 billion.
Any deal between Analog and Maxim would likely require approval
from regulators in the U.S., China and the European Union. The
companies expect to close the deal next summer.
Morgan Stanley served as Analog's financial adviser, as did BofA
Securities. JPMorgan Chase & Co. was Maxim's financial
adviser.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
July 13, 2020 08:22 ET (12:22 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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