MaxLinear announces to acquire Silicon Motion

MaxLinear announced that it has reached a definitive agreement with Silicon Motion to acquire it in a cash and stock transaction for a total transaction value of approximately $3.8 billion. The transaction is expected to close within 18 months. In the transaction, each American Depositary Share (ADS) corresponding to four shares of Silicon Motion will receive $93.54 in cash and 0.388 shares of MaxLinear common stock, for a total consideration of $114.34 per ADS

With RF, analog/mixed-signal, and processing capabilities, MaxLinear develops and sells chips for home and enterprise Ethernet, data center, broadband, home, and industrial applications, Silicon Motion has the technology of NAND flash memory controller and provides the main control chip for SSD and other storage devices. The two parties are highly complementary in business. After this combination, the new company will have a complete technology stack and will have a highly diversified technology platform with a significant presence in broadband, connectivity, infrastructure, and storage end markets. MaxLinear said that the value of the new company after the business combination is about $8 billion, the annual revenue is expected to exceed 2 billion US dollars, and the total potential market value will roughly double to $15 billion, and entered the top ten fabless semiconductor suppliers.

It is expected that the merger will not only increase in scale but also provide more technology, resources, and capabilities to accelerate product innovation, improve operational efficiency and reduce manufacturing costs. The transaction is expected to generate at least $100 million in annual operating synergies, materialize within 18 months of closing, and is expected to have an immediate and material impact on MaxLinear ‘s non-GAAP earnings per share and cash flow.