Analog Devices in Talks to Buy Maxim Integrated for More Than $17 Billion -- Update
13 Juli 2020 - 2:23AM
Dow Jones News
By Cara Lombardo
Semiconductor maker Analog Devices Inc. is in talks to buy rival
Maxim Integrated Products Inc. for roughly $20 billion in what
would be one of the largest merger deals of the year, according to
people familiar with the matter.
Analog and Maxim are discussing an all-stock deal that could be
finalized as soon as Monday, though it isn't guaranteed and
discussions could still fall apart.
Maxim's current market value is roughly $17 billion.
Should a deal come together, Maxim shareholders would own about
30% of the combined company, which would be valued at just under
$70 billion including debt, one of the people said.
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, 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 Wall Street 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.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
July 12, 2020 20:08 ET (00:08 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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