US chipmaker Analog Devices (US:ADI) has struck a deal to purchase rival Maxim Integrated Products (US:MXIM) for more than $20bn (£16bn). Maxim shareholders will receive 0.63 Analog shares for each of their shares and own 31 per cent of the enlarged group.
Analog and Maxim specialise in analogue semiconductors – these chips convert ‘real world’ inputs such as temperature into electronic signals. As we move ever closer to the ‘internet of things’, demand for such semiconductors should increase.
This tie-up would bring together the number two and three industry players with a combined market capitalisation of around $68bn – although they would likely still be some way off from challenging analogue chip leader, Texas Instruments (US:TXN). The takeover would allow Analog to expand its footprint in the automotive market.
If approved by shareholders and regulators, the transaction is expected to close next summer. But regulatory approval is not guaranteed – Broadcom’s (US:AVGO) attempted buyout of Qualcomm (US:QCOM) was blocked in 2018 over national security concerns.
