The acquisition of San Jose, California-based mostly Maxim produces a larger rival for Texas Instruments Inc.in the sector for analog and embedded processor chips, essential parts in the spread of computing and intelligence to every day equipment.
Analog Devices is now less than half the size of market leader Texas Instruments Inc.by revenue.
Maxim shareholders would receive about.63 shares of Analog stock for each Maxim share and own about 31% of the combined company.
The offer values Maxim at $78.43 per share, a premium of about 22% to its Friday close and Maxim shares were up 11% at $71.21 in mid-day trading.
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This comes on the heels of Uber Inc announcing a US$2.65 billion deal for Postmates Inc, Allstate Corp agreeing to a record US$4 billion takeover of National General Holdings Corp and Warren Buffett's Berkshire Hathaway Inc spending roughly the same amount on a gas pipeline and storage assets.
The deal, which still has to be approved by regulators, is expected to close in the summer of 2021.
Representatives for Analog Devices and Maxim declined to comment on the deal, first reported by the Wall Street Journal.
All three companies focus in analog and embedded computing factors.
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"Analog Devices' diverse market reach could help it hold up during a sharp, short-term pandemic-related disruption to demand and supply chains", Bloomberg Intelligence senior analyst Woo Jin Ho wrote in a Monday note.
The semiconductor industry's seen plenty of deals in recent years, which is no real surprise when you consider the increasingly global scope of an industry that produces chips for every electrical item you can imagine.
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Considering that 2015, the Philadelphia Stock Exchange Semiconductor Index has tripled in benefit. Above that very same interval, chip organizations have been significantly consolidating to aid them reduce expenses and provide prospects that have performed the exact. Their earnings have become more predictable and their cash generation has provided them with war chests and the ability to carry debt they could not have sustained in the past. Visit MarketWatch.com for more information on this news.
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