TLDR
- ON Semiconductor agreed to buy Synaptics in an all-cash deal worth about $5.7 billion, down from the original $7 billion all-stock offer.
- Synaptics investors will now get $123 per stock instead of 1.350 ON shares under the June agreement.
- ON stock jumped about 6% in premarket trading, while Synaptics stock rose roughly 14%.
- The new structure removes dilution risk for ON investors and is expected to boost earnings right away.
- The deal still needs Synaptics stockholder approval and regulatory clearance, with closing targeted for mid-2027.
ON Semiconductor stock climbed about 6% in premarket trading Friday after the company revised its takeover of Synaptics. The stock had closed the prior session at $80.08.
ON Semiconductor Corporation, ON
Synaptics stock moved even higher, up roughly 14% on the news. Both companies build chip technology used in cars, factories, and connected devices.
The original deal, signed in June, was an all-stock agreement. Synaptics investors would have received 1.350 ON shares for every stock they owned, valuing the deal near $7 billion.
That deal has now flipped to an all-cash transaction. Synaptics investors will instead get $123 per stock, putting the total deal value at about $5.7 billion.
The lower price tag came after an unsolicited rival bid for Synaptics from an undisclosed third party. Instead of sparking a bidding war that pushed the price up, it led both companies to settle on terms that suited them better.
Why the Cash Deal Makes Sense for ON
ON investors avoid the dilution that would have come from issuing new stock under the old agreement. That alone removes a key overhang that had weighed on the stock since June.
The company says the revised deal will boost its non-GAAP earnings per stock right away. That’s a notable shift from the original structure, which wasn’t expected to add to earnings immediately.
ON had already flagged $200 million in annual synergies from the merger. It now says there’s room for more, including added revenue and bringing some Synaptics manufacturing in-house.
Financing comes from a mix of cash on hand and debt backed by Morgan Stanley. There’s no financing condition tied to closing, which removes one more risk factor.
What Synaptics Investors Get
Synaptics CEO Rahul Patel framed the cash deal as giving investors certainty. “We are providing value certainty at a premium as compared to current value,” he said.
That’s a trade-off. Synaptics investors give up any upside from owning a stake in the combined company, but they get a fixed payout instead.
Robert W. Baird analyst Tristan Gerra kept a Hold rating on ON stock after the news, with a $108 price target. Wall Street’s broader view on ON remains a Moderate Buy, while Synaptics carries a Hold consensus.
The timing also helped. Micron’s strong earnings report the night before had already lifted chip stocks across the board, giving ON’s news extra tailwind heading into the open.
Treasury yields eased back from recent highs on the same morning too, taking some pressure off growth-focused names.
The deal still needs sign-off from Synaptics investors along with regulatory approval. The FTC has already cleared it, though reviews in other regions are ongoing.
Closing is targeted for mid-2027. Until then, both stocks will likely trade in step with developments on the approval front.
Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions — all in one powerful platform.
Sign up today and get 50% OFF full access to our premium stock picks.
Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
