Chip maker Analog Devices acquires Maxim for $20.9 billion

The all-stock transaction will value Analog Devices at more than $68 billion, though crucially, it offers the firm a bigger footprint in the automotive and data centre semiconductor segments.

Analog Devices (ADI) will acquire 69% of the acquired company, offering 0.63 ADI shares per Maxim share, with existing shareholders owning the remaining 31%. The transaction has been approved by both Board of Directors, scheduled to close in the summer of 2021.

“Today’s exciting announcement with Maxim is the next step in ADI’s vision to bridge the physical and digital worlds,” said Vincent Roche, CEO of ADI.

“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.”

For ADI, this is an interesting acquisition, allowing the company to broaden its portfolio and take a more strident position in the automotive and data centre markets.

With COVID-19 dramatically shifting the working and social activities of the world, the cloud computing and data centre market has been offered a surge in interest. Trends were already heading in this direction, but the coronavirus pandemic has acted as a catalyst to accelerate digital transformation.

The big cloud players are rapidly expanding their infrastructure across the world, while edge computing has gained interest from all connectivity segments. It does appear some of these remote working and mobility trends are going to remain once the world returns to some semblance of normality, adding more value to the acquisition.