Maxim Integrated to buy Volterra for about $605 million
(Reuters) - Chipmaker Maxim Integrated Products Inc (MXIM.O) said it would buy Volterra Semiconductor Corp VLTR.O for about $605 million to strengthen its business that makes low-energy chips.
Demand for chips that provide higher computing power using less energy is rising due to greater adoption of mobile devices.
The power management market is the fastest-growing product business in the analog chip market, Maxim said, quoting market-research firm Databeans.
Maxim's chips are used in Samsung Electronics Co Ltd's (005930.KS) high-end Galaxy smartphones such as S4 and Note 2.
Maxim's offer of $23 per Volterra share represents a premium of 55 percent to the stock's closing price on Wednesday.
Volterra's shares rose to $22.80 in premarket trading on Thursday, close to the offer price, suggesting investors expect the deal to go through. Maxim shares were untraded.
Maxim said it expects the deal to immediately add to its earnings, excluding special items.
The company said it planned to fund the deal with cash on hand, which stood at $1.2 billion at the end of June 29.
Maxim, which has a market capitalization of $8.19 billion, said it expects the deal to close early in the December quarter.
(Reporting by Neha Alawadhi and Chandni Doulatramani in Bangalore; Editing by Sriraj Kalluvila)