Chipmaker MaxLinear to buy Taiwan's Silicon Motion for about US$4b

CHIPMAKER MaxLinear said on Thursday (May 5) it will buy Taiwan-based Silicon Motion Technology for nearly US$4 billion in a cash-and-stock deal, creating one of the largest fabless semiconductor suppliers in the world.

The combination will allow the merged entity to expand into enterprise, consumer and many other growth markers with more than US$2 billion in combined revenue annually and total available market opportunity of US$15 billion, the companies said.

US-listed shares of Silicon Motion, which makes NAND flash controllers, rose 19.4 per cent in early trade to a record high, while MaxLinear's stock fell about 17 per cent.

According to media reports, Qualcomm rival MediaTek was also interested in buying Silicon Motion, which Bloomberg News reported in April was working with advisers and holding talks with potential suitors amid takeover interest.

MaxLinear will pay US$93.54 in cash and about 0.4 of its share for each Silicon Motion's American depositary shares (ADS), representing a total per ADS consideration of US$114.34.

The offer is at a 41 per cent premium to Silicon Motion's on Wednesday close of US$81.2 and a 48 per cent premium to its April 22 close, the last day of trading before news of a takeover interest was first reported.

MaxLinear will fund the deal with cash in hand and debt financing from Wells Fargo.

The deal is expected to close in the first half of 2023, after which MaxLinear's shareholders will own about 86 per cent of the combined company that will have an enterprise valuation of US$8 billion. REUTERS