Benzinga | Jul 13, 2020 05:56AM EDT

Analog Devices Looks To Acquire Maxim Integrated For $20B In All-Stock Deal: WSJ

Analog Devices Inc (NASDAQ: ADI) is in talks to acquire fellow chipmaker Maxim Integrated Products Inc (NASDAQ: MXIM) in what would be one of the largest merger deals in 2020.

What Happened

Analog and Maxim are negotiating a $20 billion all-stock deal, significantly over the latter's current $17 billion valuation.

The deal could be finalized as early as Monday, although there is a possibility of the talks falling through. Both companies have, on previous occasions, also entered merger talks.

In case a deal does go through, Maxim shareholders will receive 30% ownership of the combined entity valued at about $70 billion, inclusive of debt, the Journal noted.

Why It Matters

Data from Dealogic, a proprietary financial markets platform, as reported by the Journal, indicates that the possible merger between Analog and Maxim would be the largest this year in the United States.

The San Jose, California-based Maxim's chips are used in industrial, automotive, and health care applications.

A merger between Maxim and Analog would create a company that can give stiff competition to Texas Instruments Inc (NYSE: TXN), the leader in the $119 billion analog semiconductors segment.

Similar deals have been previously thwarted by authorities; Broadcom Inc (NASDAQ: AVGO) failed to acquire QUALCOMM, Inc (NASDAQ: QCOM) after the deal was blocked by U.S. authorities in 2018.

Price Action

On Friday, Analog Devices' shares closed 0.20% higher at $124.50, while Maxim shares closed 0.59% lower at $64.09.