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Analog Devices to buy Maxim Integrated for $21 billion

Analog has just become a significantly bigger player in the semiconductor space — and could be instrumental in the race for 5G.

In one of the largest deals of the year, semiconductor manufacturer Analog Devices announced on Monday that it would buy competitor Maxim Integrated for $21 billion, merging second- and third-largest analog semiconductor companies into a conglomerate that will go toe-to-toe with larger rival Texas Instruments.

The all-stock deal, which is expected to close this summer, would put Analog’s market valuation at over $68 billion.

“With the increased breadth and depth of our combined technology and talent, we will be able to develop more complete, cutting-edge solutions,” said Vincent Roche, Analog’s President and CEO, in a statement.

The market for semiconductors — the microscopic crystals that make up micochips — has surged in the last few years. As tech companies incorporate microchips into everyday appliances, including washing machines and cars, semiconductors will be key in developing the so-called internet of things and 5G-connected gadgets.

Analog — which focuses on industry, communications, and digital healthcare — will absorb Maxim’s capabilities in automotive and data center markets.

This is Analog’s largest deal ever, and is expected to generate $8.2 billion in revenue. Maxim’s stock soared 8% Monday, while Analog’s stock fell 6%. Under the agreement, Maxim shareholders would receive 0.63 shares for each share of Maxim’s stock, and would own 31% of the total company.

CNN

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