Skyworks Solutions will buy smaller rival Qorvo, they said on Tuesday, forming a $22 billion combined company that supplies radio-frequency chips to Apple and other smartphone makers.
The stock-and-cash deal, which will create one of the largest US suppliers of radio-frequency chips, aims to tap into a recovery in smartphone demand following the post-pandemic downturn amid Apple's focus on in-house chips.
Qorvo shareholders will receive $32.50 in cash and 0.960 of Skyworks stock for each share held, Reuters reported.
The total offer price of $105.31 represents a 14.3% premium to Qorvo's Monday close, valuing the company at $9.76 billion.
Shares of both companies rose about 12% in trading before the bell.
Skyworks designs and manufactures analog and mixed-signal chips used in wireless communication, automotive, industrial and consumer electronics.
The firm had in August forecast fourth-quarter revenue and profit above Wall Street expectations, benefiting from steady demand for its analog chips.
Apple's efforts to develop its own radio chips, first unveiled in the iPhone 16e earlier this year, could eventually reduce its dependence on suppliers such as Skyworks and Qorvo, weighing on their long-term sales prospects.
The merger of the two leading US makers of radio-frequency chips used in smartphones could also attract tough antitrust scrutiny.
The companies expect the deal to close in early 2027.
ACTIVIST SHAREHOLDER INTEREST
Skyworks CEO Phil Brace will serve as the CEO of the combined company while Qorvo chief Bob Bruggeworth will join the board.
The companies have agreed not to solicit other acquisition proposals, according to regulatory filings.
After the deal's completion, Skyworks investors will hold about 63% of the merged company, with Qorvo shareholders owning the remaining 37% on a fully diluted basis.
The Information reported earlier in the day that the companies held talks regarding a potential merger in the past few months.
In April, Qorvo appointed industry veterans Richard Clemmer and Christopher Koopmans as independent directors to its board, amid activist investor Starboard Value's push to boost the company's weak share price.
Starboard had increased its stake in the firm to about 8.9%. The activist investor did not immediately respond to a request for comment on the deal.
