MaxLinear announced the termination of the acquisition of Silicon Motion

MaxLinear has announced the execution of its contractual prerogative to rescind its intended acquisition of Silicon Motion. Originally, the deal was slated to be finalized by May 23, 2023, though it remains unclear why MaxLinear’s sudden retraction. Nonetheless, according to the official statement released, there seem to be insinuations aimed toward Silicon Motion.

MaxLinear has filed the necessary documentation with the U.S. Securities and Exchange Commission, issuing a notice to relieve itself from the obligation to complete the transaction. Reasons cited for this move include: firstly, certain conditions stipulated within the merger agreement remained unmet or were unfulfillable; secondly, Silicon Motion had suffered from a sustained detrimental impact; thirdly, Silicon Motion had gravely violated the declarations, assurances, covenants, and agreements within the merger agreement, consequently granting the company the right to terminate; and finally, regardless of circumstances, due to certain conditions within section six of the merger agreement remaining unmet or unwaived by May 5, 2023, the initial extension period had expired without automatic prolongation.

Last May, MaxLinear announced its definitive agreement with Silicon Motion, intending to acquire the latter through a cash and stock transaction, approximating a total transaction value of $3.8 billion, expecting to complete the deal within an 18-month period. As part of this transaction, for every four ordinary shares of Silicon Motion, each American Depositary Share (ADS) would receive $93.54 in cash and 0.388 common shares of MaxLinear. Each ADS’ total consideration amounted to $114.34 (calculated based on MaxLinear’s closing price on May 4, 2022).

Silicon Motion’s shareholders approved MaxLinear’s merger proposal at an extraordinary general meeting on August 31, 2022. As per the plan, Silicon Motion was to become a fully-owned subsidiary of MaxLinear, with the transaction garnering approval from regulatory bodies, including the State Administration for Market Regulation (SAMR).