❯ onsemi changes its Synaptics acquisition from a roughly $7 billion stock deal to about $5.7 billion in cash

Stock becomes cashonsemi and Synaptics announced an amended merger agreement on October 1. According to their SEC filing, onsemi will acquire Synaptics for $123 per share in cash, about $5.7 billion in total. The original agreement signed on June 25 was an all-stock transaction valued at about $7 billion.

Power chips plus edge AIonsemi makes power and sensing chips for automotive, industrial and AI data center customers. Synaptics provides edge AI solutions including embedded compute, wireless connectivity and multimodal sensing. In another filing, the companies say the combined business will serve the edge AI and “physical AI” markets.

After a third-party approachThe amendment followed an unsolicited, non-binding competing proposal to Synaptics from a third party, whose identity and terms were not disclosed. Synaptics’ board unanimously determined that the amended onsemi deal remains in shareholders’ best interests. Closing is expected in mid-2027, subject to Synaptics shareholder and regulatory approvals. The US Federal Trade Commission has cleared it, and other jurisdictions are still reviewing.

Who carries the share-price riskIn a stock deal, what Synaptics shareholders finally receive depends on onsemi’s share price. With cash, the amount is fixed at $123 a share. onsemi will pay with cash on hand plus committed debt financing from Morgan Stanley, says the deal will be immediately accretive to non-GAAP earnings per share, and expects $200 million of annual synergies.

▪ SIGNALIn the consolidation of edge AI chips, the seller prefers certain cash to the buyer’s stock, which is itself a statement about chip-stock valuations.