ON Semiconductor Corp. (NASDAQ:ON) stock fell Friday after the company announced a definitive agreement to acquire Synaptics Incorporated (NASDAQ:SYNA) in an all-stock deal with an enterprise value of about $7 billion.
Under the agreement, Synaptics shareholders will receive 1.350 ON Semiconductor shares for each Synaptics share. The offer represents a roughly 19% premium based on the companies’ 10-day volume-weighted average closing prices.
ON Semiconductor Targets Physical AI Growth
The acquisition is expected to strengthen ON Semiconductor’s intelligent systems portfolio by combining its power and sensing technologies with Synaptics’ Edge AI computing, wireless connectivity and human-machine interface solutions.
The companies said the deal will expand ON Semiconductor’s total addressable market by $30 billion to $243 billion by 2030.
CEO Hassane El-Khoury said the acquisition positions ON Semiconductor to benefit from the growing Physical AI market by combining power, sensing, compute and control technologies. He added that Synaptics also expands the company’s software capabilities and strengthens its edge AI portfolio.
Synaptics President and CEO Rahul Patel said the combination brings together complementary technologies to deliver integrated Edge AI platforms. He added that the all-stock transaction allows Synaptics shareholders to participate in the combined company’s future growth.
Synergies, Financial Impact And Closing Timeline
The combined company expects to provide integrated solutions for autonomous vehicles, robotics, and augmented and virtual reality applications.
Synaptics’ Astra platform adds AI processors, neural processing units, wireless connectivity and an open-source software stack to ON Semiconductor’s product portfolio.
The companies expect the transaction to be accretive to non-GAAP earnings per share within 18 months of closing. They also expect about $200 million in annual synergies.
Synaptics shareholders are expected to own about 12% of the combined company on a fully diluted basis, while one Synaptics director is expected to join ON Semiconductor’s board.
The acquisition is expected to close in mid-2027, subject to Synaptics shareholder approval, regulatory clearances and customary closing conditions.
Both companies reaffirmed their previously issued financial outlooks. Morgan Stanley advised ON Semiconductor, while Qatalyst Partners served as financial advisor to Synaptics.
ON Semiconductor And Synaptics Stock Performance
Price Action: Synaptics shares rose 4.68% to $131.50 during Friday’s premarket session, according to Benzinga Pro data. ON Semiconductor shares fell 13.60% to $102.59.
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