ON Semiconductor Corp. ON Semiconductor (ON) and Synaptics Inc. Synaptics (SYNA) on Thursday announced a definitive agreement to combine their businesses, outlining expected strategic and financial impacts of the transaction.

Deal Details

ON Semi will acquire Synaptics in an all-stock transaction, representing a total enterprise value of approximately $7 billion. The transaction value reflects a fixed exchange ratio of 1.350 shares of ON Semi common stock for each Synaptics share and represents an approximately 19% premium to the volume-weighted average closing prices of ON Semi and Synaptics over the past 10 trading days.

The companies stated the combination would expand ON Semi's capabilities across AI infrastructure and extend into edge-based applications.

The combined entity is expected to address additional end markets, including autonomous driving, robotics and augmented and virtual reality.

Financially, the companies stated the transaction is expected to be accretive to non-GAAP earnings per share within 18 months of closing, with anticipated annual synergies of approximately $200 million.

Under the terms of the agreement, Synaptics shareholders will receive 1.350 shares of ON Semi common stock for each Synaptics share held at closing.

This exchange ratio implies that Synaptics shareholders will own approximately 12% of the combined company on a fully diluted basis. The boards of directors of both companies have unanimously approved the transaction and one Synaptics board member is expected to join the ON Semi board following closing.

Price Action

ON Semi shares moved lower on the news, while Synaptics climbed in after-hours trading following the announcement.

ON, SYNA Stock Price Activity: ON Semiconductor stock was down 7.61% at $109.70 and Synaptics stock climbed 11.45% to $142 during after-hours trading on Thursday, according to market data.