The deal has been unanimously approved by the boards of directors of both companies but may take until the end of the first half of 2017 to close. It is subject to regulatory approvals in various jurisdictions, the approval of Linear Technology’s shareholders, and other customary closing conditions.
Assuming the deal goes through it will produce a company with approximately $5 billion of anticipated annual revenues – the two companies had $4 billion of analog IC revenue in 2015 – and will lift Analog Devices into second ranked analog IC vendor behind Texas Instruments, according to IC Insights.
Top ten vendors of analog ICs ranked by 2015 sales revenue. Source: IC Insights.
The combined company will be a strong competitor and leader in a range of analog and power products including data converters, power management ICs, amplifiers, interface and conditioning ICs and RF and microwave products. Analog Devices described the acquisition as "high complementary" adding that it would take Analog Devices' addressable annual market from $8 billion to $14 billion.
"Our shared focus on engineering excellence and our highly complementary portfolios of industry-leading products will enable us to solve our customers’ biggest and most complex challenges at the intersection of the physical and digital worlds," said Vincent Roche, CEO of Analog Devices, in statement. Roche will carry on as CEO of the enlarged Analog Devices and David Zinsner, CFO of Analog Devices will also stay in post.
The Linear Technology name will be used as brand for Analog Devices power management products.
Analog Devices plans to fund the acquisition by issuing 58 million new shares of Analog Devices common stock, and $7.3 billion of new long-term debt with the remainder coming from balance sheet cash.
Linear Technology was formed in 1981 by Robert Swanson and Bob Dobkin who left National Semiconductor to do so.
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