The deal under negotiation calls for Maxim shareholders to be paid in Analog Devices stock rather than cash, allowing them to share in the upside of combined company's shares, the sources said.
U.S. semiconductor maker Analog Devices Inc is in advanced talks to acquire Maxim Integrated Products Inc, an industry peer that has a market capitalization of $17.1 billion, people familiar with the matter said on Sunday.
The acquisition would expand Analog Devices' offerings in applications such as autonomous vehicles and 5G telecommunications networks. It would also present revenue and cost synergies, given the common focus of the two companies on integrated circuits.
Maxim shares have rallied 50% since hitting a low in March amid the coronavirus-induced market turmoil.
The deal under negotiation calls for Maxim shareholders to be paid in Analog Devices stock rather than cash, allowing them to share in the upside of combined company's shares, the sources said. The stock exchange ratio being discussed could not be learned.
If the negotiations conclude successfully, a deal could be announced as early as this week, the sources said, requesting anonymity because the matter is confidential. The Wall Street Journal first reported on the deal talks on Sunday.
Based in Norwood, Massachusetts, Analog Devices providers sensors, data converters, amplifiers and other signal processing products to a range of industries, from transportation and healthcare to instrumentation and portable consumer devices. It has a market capitalization of $45.9 billion.
San Jose, California-based Maxim designs and manufactures analog chips that are used in cars, manufacturing, energy, communications, healthcare and connected devices.
The deal would come three years after Analog Devices acquired Linear Technology Corp, another U.S. manufacturer of analog integrated circuits, for $15.8 billion.