onsemi to Buy Synaptics in $5.7 Billion Cash Deal
After a third-party bid, the semiconductor maker cut the June all-stock pact to $123 a share and now expects immediate non-GAAP EPS accretion.
onsemi (ON) and Synaptics Incorporated (SYNA) amended their June 25 merger agreement after an unsolicited competing proposal, cutting the deal to an all-cash purchase of about $5.7 billion, or $123 a share, from the prior all-stock structure valued at about $7 billion.
The amendment follows a non-binding proposal from a third party. After a review with financial and legal advisors, Synaptics’ board unanimously said the onsemi transaction, as amended, continues to be in the best interests of Synaptics and its shareholders.
President and CEO Hassane El-Khoury said the revised terms are a more financially attractive transaction for onsemi shareholders, with the all-cash structure delivering higher value through lower total consideration and an expectation that the deal will be immediately accretive to non-GAAP earnings per share upon closing.
El-Khoury also said onsemi has identified incremental opportunities beyond the previously announced $200 million of annual run-rate synergies, including revenue synergies and insourcing a portion of Synaptics’ production, expected after the initial 18 months post-close. He said Synaptics is accretive to onsemi’s long-term model, with a strong growth outlook and attractive gross margin profile, and that the target complements growth in onsemi’s AI data center business while adding highly profitable human-machine interface and sensing products that generate strong and predictable cash flows.
The original June agreement was an all-stock deal at a fixed exchange ratio of 1.350 onsemi shares for each Synaptics share, which the companies then described as an approximately 19% premium to the 10-day volume-weighted average closing prices of both stocks. That deal was framed as expanding onsemi’s total addressable market by $30 billion to $243 billion by 2030 and positioning the combined company at the intersection of power, sense, connected compute and control.
Synaptics President and CEO Rahul Patel said the board has been focused on delivering the best outcome for shareholders and that the all-cash structure provides value certainty at a meaningful premium compared with current value.
The transaction will be financed through cash on hand and committed financing. onsemi has obtained fully committed debt financing from Morgan Stanley, and the amended agreement does not include a closing condition related to onsemi’s financing.
The deal is still expected to close by mid-2027, subject to approval by Synaptics shareholders, required regulatory approvals and other customary closing conditions. The United States Federal Trade Commission has approved the transaction; regulators in other jurisdictions are reviewing it.