ON Semiconductor has announced a $6.2 billion all-stock acquisition of Synaptics, with a 19% premium targeting smart systems.

ON Semiconductor Corporation (ON.US) has agreed to acquire Synaptics (SYNA.US), a specialist in intelligent device semiconductors, in an all-stock transaction valued at approximately $6.2 billion. According to the company's statement, investors holding each share of Synaptics stock will receive 1.35 shares of ON Semiconductor common stock, representing approximately a 19% premium based on the closing prices of both ON Semiconductor and Synaptics over the past 10 trading days. The total enterprise value of the transaction, including debt, is approximately $7 billion, and it is expected to be completed in mid-2027 pending relevant approvals. A year ago, ON Semiconductor abandoned its efforts to acquire Allegro MicroSystems Inc. for $6.9 billion after determining that there was "no viable path" to reaching a deal. Regarding its latest acquisition target, the company stated that it is seeking to expand its business from power and sensing into intelligent systems. ON Semiconductor CEO Hassan Al-Koury stated in a declaration, "As artificial intelligence emerges from the cloud and enters the physical world, including automotive and industrial sectors, the next phase of innovation will rely on systems that can perceive, decide, act, and adapt in real-time." Al-Koury added in an interview, "From a technology perspective, the complementarity of our product portfolios is what makes us very excited about this deal." Both ON Semiconductor and Synaptics reiterated their financial outlook independently. In after-hours trading at 5:15 pm New York time, ON Semiconductor's stock fell by 8.2%, while Synaptics' stock rose by 12%. Al-Koury stated in the interview that ON Semiconductor expects the acquisition of Synaptics to bring gains to the company within 18 months after the completion of the transaction. He mentioned that the acquisition may result in job cuts and predicted "most of the cuts will occur in operational expenses." "We are primarily focused on retaining research and development (R&D) to concentrate on new products," Al-Koury said. Morgan Stanley and J.P. Morgan Securities served as financial advisors for ON Semiconductor, while Sidley Austin LLP served as legal advisors. Qatalyst Partners served as financial advisors for Synaptics, and Baker McKenzie served as legal advisors. When asked whether ON Semiconductor is eyeing more acquisition deals, Al-Koury stated, "As this is a stock deal, we have ample flexibility on our balance sheet."