Chipmaking Giants Analog and Maxim Join Forces in $21B Deal

Two of the more prominent U.S. chipmakers are combining forces in a near-$21 billion all-stock deal that will give Texas Instruments (TXN) - Get Report a run for its money.

Analog Devices (ADI) - Get Report on Monday announced plans to acquire Maxim Integrated Products (MXIM) - Get Report in an all-stock deal valued at $21 billion in what is one of the largest merger deals so far this year.

Under the agreement, Maxim stockholders will receive just under two-thirds of a share of ADI common stock for each share of Maxim common stock they hold at the closing of the transaction, which is expected to occur next summer.

The announcement comes at a tough time for chipmakers, who have been reeling from supply-chain issues as well as declining demand amid the coronavirus pandemic, which cut short an initial rebound from last year's losses.

However, the deal is seen as complimentary for both companies, given their specialized focus on automotive and healthcare, respectively.

The deal, which will create a combined company valued at around $68 billion, values San Jose, California-based Maxim well above its current market capitalization of roughly $17 billion. Norwood, Mass.-based Analog has a market value of $46 billion.

Even so, the combined company will still lag behind Texas Instruments, the leader in analog semiconductors, with a $119 billion market value.

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