The combined company will have a revenue approaching $5 bn in analogue and power devices. This catapults the company to the number two position behind Texas Instruments with revenue of $8.3 bn and ahead of Infineon and Skyworks, according to the latest figures from market researchers IC Insights.
Linear Technology shareholders will receive $46.00 per share in cash and 0.2321 of a share of Analog Devices common stock, valuing Linear at $14.8 bn. The Linear Technology brand will continue to be used for the power management products.
“The combination of Analog Devices and Linear Technology brings together two of the strongest business and technology franchises in the semiconductor industry,” said Vincent Roche, President and Chief Executive Officer of Analog Devices. “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. We are creating an unparalleled innovation and support partner for our industrial, automotive, and communications infrastructure customers.”
“For 35 years, Linear Technology has had great success by growing its business organically,” said Bob Swanson, Executive Chairman and Co-founder of Linear Technology. “However, this combination of Linear Technology and Analog Devices has the potential to create a combination where one plus one truly exceeds two. As a result, the Linear Technology Board concluded that this is a compelling transaction that delivers substantial value to our shareholders, and the opportunity for additional upside through stock in the combined company. By combining our complementary areas of technology strength, we have an excellent opportunity to reinforce our leadership across the analog and power semiconductor markets [to] advance the technology and deliver innovative analogue solutions to our customers worldwide.”
The new ADI is expected to see $150 m a year of cost savings in the first 18 months and Roche continues as President and CEO of the combined company with a strong representation from both companies in management across all functions.