Analog Devices Buys Rival Chipmaker Maxim

Semiconductor maker Analog Devices claimed Monday it would receive rival Maxim Built-in Items for about $21 billion in a move to include automotive and data middle answers to its portfolio.

The all-inventory offer would develop a chipmaking large with a merged company price of $sixty eight billion and merged income of $8.two billion.

Wells Fargo analyst Gary Mobley claimed it would be the largest chip-sector offer in four decades. It is also the largest offer of any sort for the yr so significantly.

Analog claimed Maxim’s energy in the current market for chips used in autos and data facilities would be “highly complementary” to its energy across the industrial, communications and digital health care markets.

“With the greater breadth and depth of our merged engineering and talent, we will be capable to produce far more complete, cutting-edge answers,” Analog CEO Vincent Roche claimed in a information launch. “Maxim is a respected signal processing and electrical power administration franchise with a verified engineering portfolio and extraordinary history of empowering design innovation.”

Roche explained to Reuters that the companies’ merged engineering teams would be capable to design far more specialized, bigger-margin chips for shoppers these types of as automakers.

“If you are accomplishing commodities, you are at the mercy of the of the heavy hammer of the procurement individuals,” he claimed. “But our activity is about acquiring there initially, acquiring out on the edge and creating a authentic effect at the software level for our shoppers.”

The merged company will have far more than fifty,000 items and ten,000 engineers, serving far more than a hundred twenty five,000 shoppers, with an addressable current market of $sixty billion, Analog claimed.

Beneath the terms of the offer, Maxim stockholders will acquire .630 of Analog inventory for every single share they possess, supplying them a 31% stake in the merged company. Analog shares fell three.four% to $140.32 in trading Monday although Maxim’s shares rose 11.one% to $seventy two.21.

Maxim, which was established in 1983, manufactures analog chips that are used in autos, producing, power, communications, health care and linked gadgets.

“I am excited for this future chapter as we carry on to thrust the boundaries of what’s feasible, collectively with ADI,” Maxim CEO Tunç Doluca claimed.

Analog Devices, automakers, Maxim Built-in Items, semiconductors, Vincent Roche