Analog Devices to Acquire Linear Technology Corp

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Analog Devices Inc. (Nasdaq: ADI) agreed to purchase Linear Technology Corp (Nasdaq: LLTC) on July 26, 2016, for approximately $12.8 billion in cash and stock. This deal Linear Technology as at $60 each. This acquisition marks the merger of to of the largest names in a subset of the semiconductor industry. Acquiring Linear Technology will reduce Analog’s reliance on Apple and diversify the company’s offerings with products such as power-management chips for handsets. This will also allow the company to compete with the largest analog-chip vendor in the country, Texas Instruments. Analog Devices estimates that this merger will result in $5 billion in annual sales and that the company should be able to achieve approximately $150 in annual cost savings within 18 months of finalizing the deal. Analog intends to fund this transaction with around $7.3 billion in new debt and cash as well as about 58 million new shares. Qatalyst Group and Credit Suisse served as financial advisers on this transaction with Cooley LLP and Cravath, Swaine & Moore as legal advisers.

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