U.S. chip maker MaxLinear will buy Taiwanese company Silicon Motion Technology for nearly four billion (93.4 billion kroner). This will create one of the largest suppliers of chips without a manufacturing plant in the world, Reuters reported.
MaxLinear will pay $ 93.54 and 0.4 of its cash shares per Silicon Motion ADS bond per share, equivalent to a total price of $ 114.34 per ADS. The bid is 41 percent higher than Wednesday’s final ADS Silicon Motion price.
The agreement is likely to be finalized in the first half of next year. The merged company’s value will be about eight billion dollars and MaxLinear shareholders will own a 86 percent stake in it. Combined company profits are expected to exceed $ 2 billion per year.
The merged company will be a chip company called fabless. These are companies that design, test and sell chips under their own brand or for other brands but do not own a manufacturing plant. Instead, they outsource production to other manufacturers, such as TSMC, Globalfoundries or UMC. Fabless companies include AMD, Qualcomm, Nvidia, Apple, Rambus and MediaTek. In the past, chip companies also owned manufacturing plants. Some, like Intel and Texas Instruments, still have them.
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