(Reuters) - U.S. semiconductor company Analog Devices Inc (NASDAQ:ADI) said on Monday it offered to buy rival chipmaker Maxim Integrated Products Inc (NASDAQ:MXIM) for $20.91 billion (16.6 billion pounds) in an all-stock deal.
Under the terms, Maxim stockholders will receive 0.630 of Analog Devices stock for each share they own, the companies said in a statement.
The offer values Maxim at $78.43 per share, a premium of about 22% to its Friday close. Maxim shares were up 17% at $75 in premarket trading on Monday, while Analog Devices was up by less than a 1%.
The deal is expected to add to adjusted earnings of the combined entity in about 18 months following the close, with $275 million in cost savings by the end of year two, the companies said.
Two Maxim directors, including Chief Executive Officer Tunç Doluca, will join Analog Devices' board.