Analog Devices to buy Maxim Integrated Products for $20.9bn

US semiconductor company Analog Devices has agreed to buy Maxim Integrated Products for $20.9bn in an all-share deal.

Analog said the transaction, which was unanimously approved by the boards of directors of both companies, will strengthen the business "as an analog semiconductor leader with increased breadth and scale across multiple attractive end markets".

Maxim designs, manufactures and sells analog and mixed-signal integrated circuits.

Under the terms of the agreement, which values the combined entity at more than $68bn, Maxim shareholders will receive 0.630 of a share of ADI common stock for each share of their shares. Upon closing, ADI shareholders will own around 69% of the combined business, while Maxim stockholders will own the rest.

Vincent Roche, president and chief executive officer of ADI, said: "ADI and Maxim share a passion for solving our customers’ most complex problems, and with the increased breadth and depth of our combined technology and talent, we will be able to develop more complete, cutting-edge solutions.

"Maxim is a respected signal processing and power management franchise with a proven technology portfolio and impressive history of empowering design innovation. Together, we are well-positioned to deliver the next wave of semiconductor growth, while engineering a healthier, safer and more sustainable future for all."

Analog said the deal is expected to be accretive to adjusted earnings per share 18 months after closing, with $275m of cost synergies by the end of year two, driven mainly by lower operating expenses and cost of goods sold.

The transaction is expected to complete in summer 2021.