Skyworks and Qorvo combine to create USD22b radio-chip giant
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The news: Key Apple suppliers Skyworks Solutions and Qorvo confirmed that they will merge to create one of the US’ largest suppliers of radio-frequency chips.
The numbers: The stock-and-cash deal values the combined enterprise at approximately USD22 billion ($33.41 billion).
Qorvo shareholders will receive USD32.50 in cash and 0.960 of Skyworks stock for each share held. The total offer price of USD105.31 represents a 14.3% premium to Qorvo’s Monday close, valuing the company at USD9.76 billion.
The context: The transaction follows warnings raised by both companies that sales to their biggest customer, Apple, were weakening as other rivals were winning business. Apple has been pursuing a strategy to develop its own radio chips could reduce the tech giant’s reliance on suppliers like Skyworks and Qorvo.
The news, announced Tuesday, confirmed a report in The Information late Monday night.
A press release confirming the news explains that the combined entity will be able to achieve greater scale to compete with larger chipmakers as well as strengthening the merged company’s innovation pipeline.
Qatalyst Partners and Goldman Sachs are serving as financial advisors to Skyworks, Skadden, Arps, Slate, Meagher & Flom LLP is serving as Skyworks’ legal adviser. Qorvo is advised by Centerview Partners and Davis Polk & Wardwell LLP.
What they said: “This combination marks an important milestone for our industry and for Skyworks,” said Phil Brace, CEO and president of Skyworks. “Combining Skyworks’ and Qorvo’s complementary portfolios and world-class engineering teams will strengthen our ability to meet growing customer demand across mobile and diversified Broad Markets. With enhanced scale, a more diversified customer base and operational synergies, we can bring even greater innovation to our customers and sustainable value to our shareholders.”
The source: Skyworks
