Linear Technology (LLTC) stock rocketed to a 15-year high Tuesday after Apple (AAPL) supplier Analog Devices (ADI) announced an agreement to acquire its rival in a deal the companies valued at $14.8 billion, or about $60 per Linear share.
The companies announced the acquisition agreement shortly before the close of Tuesday's regular session, and ahead of Linear's June-quarter earnings report, after rumors of their talks sent Linear's shares flying. On the stock market today, Linear stock shot up 29% to 62.53.
Bloomberg first reported about the pending deal.
After the close, Linear reported flat profit of 54 cents and a 1.5% sales drop, both roughly in line with views. Linear Tech fell 1% in late trade to 61.75.
Analog Devices stock closed up 3.9% to 62.87, and jumped another 7% after the close. Several Apple suppliers rallied on the iPhone maker's better-than-expected earnings and guidance.
IBD'S TAKE: Linear Technology stock has an IBD Composite Rating of 65, meaning it outperforms nearly two-thirds of all stocks in terms of key metrics including Analog Devices stock which has a middling CR of 49.
Under the terms, Linear shareholders will receive $46 share in cash and 0.2321 of a share of Analog Devices common stock for each share of Linear stock they hold at the closing of the transaction. The transaction values the combined company near $30 billion, the companies said.
At Analog's closing price, the deal would be worth $60.59 a share. Based on Analog's after-hours stock price, the deal is worth $61.67 a share.
Both companies make analog chips, which convert real-world senses (touch, sound, temperature, etc.) into electronic signals that machines can read.
Analog Devices products are used in mobile phones and cars, among other end markets. Linear's chips go into a plethora of end markets, including networking, industrial, automotive, medical, consumer and military applications.
"Our shared focus on engineering excellence and our highly complementary portfolios of industry-leading products will enable us to solve our customers' biggest and most complex challenges at the intersection of the physical and digital worlds," Analog Devices CEO Vincent Roche said in a statement.
