May 5 (Reuters) - Chipmaker MaxLinear Inc said on
Thursday it will buy Taiwan-based Silicon Motion Technology Corp
for nearly $4 billion in a cash-and-stock deal,
creating one of the largest fabless semiconductor suppliers in
The combination will allow the merged entity to expand into
enterprise, consumer and many other growth markets with more
than $2 billion in combined revenue annually and total available
market opportunity of $15 billion, the companies said.
U.S.-listed shares of Silicon Motion, which makes NAND flash
controllers, rose 19.4% in early trade to a record high, while
MaxLinear's stock fell about 17%.
According to media reports, Qualcomm Inc rival
MediaTek Inc was also interested in buying Silicon
Motion, which Bloomberg News https://www.bloomberg.com/news/articles/2022-04-24/silicon-motion-is-said-to-explore-sale-amid-takeover-interest
reported in April was working with advisors and holding talks
with potential suitors amid takeover interest.
MaxLinear will pay $93.54 in cash and about 0.4 of its share
for each Silicon Motion's American depositary shares (ADS),
representing a total consideration of $114.34 per ADS.
The offer is at a 41% premium to Silicon Motion's Wednesday
close of $81.2 and a 48% premium to its April 22 close, the last
day of trading before news of a takeover interest was first
MaxLinear will fund the deal with cash in hand and debt
financing from Wells Fargo. The acquisition is expected to be
immediately accretive to operating margins, earnings and cash
flow levels, the companies said.
The deal is likely to close in the first half of 2023, after
which MaxLinear's shareholders will own about 86% of the
combined company that will have an enterprise valuation of $8
BMO Capital Markets Corp acted as financial advisor to
MaxLinear and Goldman Sachs (Asia) LLC to Silicon Motion on the
(Reporting by Chavi Mehta, Akash Sriram and Sohini Podder in
Bengaluru; Editing by Sriraj Kalluvila, Shounak Dasgupta and