Analog deals in a digital world

Analog deals in a digital world

Competition costs Analog $20 billion

Purchase, purchase, purchase! The week starts with a new acquisition in sight, one that could be announced today, according to people familiar with the matter. The new deal comes from Analog Devices Inc., a Norwood-based multinational semiconductor company that works in data conversion, power management technology, and the San Jose-based company, Maxim Integrated Products Inc. which deals with integrated circuits for consumer and computing markets, automotive, industrial, and communications.

The deal comes in propitious for the San Jose company, as this deal raises its market cap at roughly $17 billion. Rumor has it that the agreement will reach $20 billion. Both Analog and Maxim are very profitable in their field, as they have a gross margin of around 65%.

If the deal closes, it could be the largest deal of the year, to date.

Even though for Maxim Integrated could be a matter of money, for Analog, it means a step forward in securing its spot closer to the market leader - Texas Instruments Inc.

Purchasing Maxim won't erase the difference, but it would expand Analog's portfolio regarding its products. At the moment, Texas Instruments lacks various products in its collection, which can help it dominate the market.

Based on all these, Maxim Integrated stock fell by 0.59%, while Analog Devices closed higher by 0.20%.

Read more about the other mergers that happened this year here!

Sources: Bloomberg.com, marketwatch.com, finance.yahoo.com

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