Analog Devices to acquire Linear Technology

July 28, 2016 // By Peter Clarke with addtional content by Graham Prophet
Analog Devices Inc. is set to buy Linear Technology Corp. in a cash and stock deal for $14.8 billion; almost a 'merger of equals', the value of the combined companies is estimated at around $30billion.

The move is suggestive of a resurgence of M&A (mergers & acquisitions) activity similar to that which took place in 2014/2015. While the economies of scale in analogue semiconductors are not as compelling as in logic - production being characterised by many disparate product lines and the necessity of maintaining multiple distinct process technologies - companies nevertheless see value in consolidation. The market appears to agree, as it marked the stock of both companies up in the hours following the announcement of the takeover.


ADI had previously been rumoured to have made initial explorations around a bid for Maxim Integrated.


The ADI/Linear deal has been unanimously approved by the boards of directors of both companies but may take until the end of the first half of 2017 to close. It is subject to regulatory approvals in various jurisdictions, the approval of Linear Technology’s shareholders, and other customary closing conditions.

Assuming the deal goes through it will produce a company with approximately $5 billion of anticipated annual revenues – the two companies had $4 billion of analog IC revenue in 2015 – and will lift Analog Devices into second ranked analog IC vendor behind Texas Instruments, according to IC Insights.

Top ten vendors of analog ICs ranked by 2015 sales revenue. Source: IC Insights.

The combined company will be a strong competitor and leader in a range of analog and power products including data converters, power management ICs, amplifiers, interface and conditioning ICs and RF and microwave products. Analog Devices described the acquisition as "high complementary" adding that it would take Analog Devices' addressable annual market from $8 billion to $14 billion.


ADI also has a significant processor/logic business activity, with its lines of digital signal processors (Sharc, Blackfin) and 'analogue microcontrollers' - devices with MCU cores plus analogue signal processing elements.


"Our shared focus on engineering excellence and our highly complementary portfolios of industry-leading products will