The firms announced on Tuesday that Skyworks Solutions, which provides radio frequency chips to Apple and other smartphone manufacturers, will combine with rival Qorvo to form a combined business worth approximately $22 billion.
One of the biggest U.S. providers of radio-frequency chips used in smartphones, automobiles, and other connected devices will be established as a result of the stock-and-cash transaction.
For each share owned, Qorvo owners will receive 0.960 of a Skyworks share and $32.50 in cash.
In trading before the bell, Qorvo’s shares—which have increased by over 32% this year—rose by roughly 11%, while Skyworks’ stock fell by roughly 1%.
Skyworks investors will own roughly 63% of the combined business after the merger closes, with Qorvo shareholders holding the remaining 37% on a fully diluted basis.
Analog and mixed-signal chips used in consumer electronics, automotive, industrial, and wireless communication are designed and produced by Skyworks.
Due to consistent demand for its analog chips, the company had predicted fourth-quarter sales and profit in August that were above Wall Street projections.
Long-term sales prospects for vendors like Skyworks and Qorvo may be impacted by Apple’s efforts to manufacture its own radio chips, which were initially revealed in the iPhone 16e earlier this year.
However, after the post-pandemic decline, analysts anticipate that both businesses will profit from a rebound in smartphone demand.
As activist investor Starboard Value pushed to raise the company’s low share price, Qorvo hired industry veterans Richard Clemmer and Christopher Koopmans as independent directors to its board in April.
Starboard now owns roughly 8.9% of the company.
Since a merger would bring together two of the top American producers of radio-frequency semiconductors used in cellphones, it might also come under antitrust scrutiny.
