Purchase price is $14.8B in cash, stock; combination creates an analog chip powerhouse.
Analog Devices has agreed to acquire Linear Technology for about $14.8 billion in cash and stock, creating an analog chip supplier that will rival Texas Instruments, STMicroelectronics, Infineon Technologies, and NXP Semiconductors in scope.
The deal calls for Linear Technology shareholders to get $46 per share in cash and 0.2321 of a share in ADI common stock for their shares.
The transaction is set to close in the first half of 2017, subject to regulatory clearance and approval by Linear Technology’s shareholders. The combined company will be known as Analog Devices. Vincent Roche, ADI’s president and chief executive officer, will hold those posts in the new set-up, while David Zinsner, ADI’s senior vice president and chief financial officer, will have the same post after the merger.
ADI will maintain Linear Technology as a product brand for its power management ICs.
The proposed combination would create a worldwide leading vendor in amplifiers, data converters, interface chips, microwave devices, PMICs, and radio-frequency devices. It would expand ADI’s total addressable market from $8 billion to $14 billion, the companies said.
“The combination of Analog Devices and Linear Technology brings together two of the strongest business and technology franchises in the semiconductor industry,” ADI’s Roche said in a statement. “Our shared focus on engineering excellence and our highly complementary portfolios of industry-leading products will enable us to solve our customers’ biggest and most complex challenges at the intersection of the physical and digital worlds. We are creating an unparalleled innovation and support partner for our industrial, automotive, and communications infrastructure customers, and I am very excited about what this acquisition means for our customers, our employees, and our industry.”
Bob Swanson, executive chairman and co-founder of Linear Technology, said in the same statement, “For 35 years, Linear Technology has had great success by growing its business organically. However, this combination of Linear Technology and Analog Devices has the potential to create a combination where one plus one truly exceeds two. As a result, the Linear Technology board concluded that this is a compelling transaction that delivers substantial value to our shareholders, and the opportunity for additional upside through stock in the combined company. Analog Devices is a highly respected company. By combining our complementary areas of technology strength, we have an excellent opportunity to reinforce our leadership across the analog and power semiconductor markets, enhancing shareholder value. Together, Linear Technology and Analog Devices will advance the technology and deliver innovative analog solutions to our customers worldwide. We are committed to working with the ADI team to ensure a smooth transition.”