TLDR
- ON Semiconductor is acquiring Synaptics in an all-stock deal valued at approximately $7 billion
- ON stock dropped around 14% to $102.35 in premarket trading Friday after the announcement
- Synaptics shareholders will receive 1.35 ON shares per Synaptics share, a ~19% premium
- The deal is expected to close in mid-2027 and be earnings-accretive within 18 months of closing
- ON says the deal could expand its total addressable market by $30 billion to $243 billion by 2030
ON Semiconductor has agreed to acquire Synaptics in an all-stock deal worth around $7 billion, its largest acquisition ever.
ON Semiconductor Corporation, ON
The news sent ON stock down roughly 14% to $102.35 in premarket trading Friday. That’s a sharp reversal for a stock that had surged 119% this year on the back of rising semiconductor valuations.
Synaptics investors fared better. The stock was up around 11% to $140 in after-hours trading Thursday, reflecting the premium on offer.
Under the terms of the deal, each Synaptics share will convert to 1.35 ON Semiconductor shares. That exchange ratio represents a roughly 19% premium based on the 10-day volume-weighted average closing prices of both stocks.
The deal was unanimously approved by the boards of both companies. It still needs Synaptics shareholder approval and regulatory clearance before closing, which is targeted for mid-2027.
The strategic logic centers on what ON and Synaptics are calling “physical AI” — AI that runs locally on hardware rather than relying on cloud servers. Think autonomous vehicles, industrial robots, and connected devices.
Synaptics brings its Astra platform to the table, which combines AI processors, neural processing units, and wireless connectivity including Wi-Fi, Bluetooth, and GPS.
What ON Gets From the Deal
ON Semiconductor has traditionally been known for analog chips in automotive and industrial markets. It has expanded into data center sales but has not been seen as a core AI play — until now.
CEO Hassane El-Khoury said the acquisition is about positioning the company at what he described as the intersection of sensing, deciding, acting, and adapting in real time.
ON estimates the deal could expand its total addressable market by anywhere from $30 billion to $243 billion by 2030, a wide range that reflects genuine uncertainty about how fast edge AI adoption moves.
The company expects the transaction to be accretive to non-GAAP earnings per share within 18 months of close, with $200 million in annual synergies targeted.
Synaptics President and CEO Rahul Patel pointed to the all-stock structure as a feature, not just a financial mechanism. He said it allows Synaptics holders to remain invested in the combined company’s future.
Deal Structure and Advisors
On a fully diluted basis, Synaptics shareholders will own approximately 12% of the combined company. One Synaptics board member will also join ON Semiconductor’s board as part of the agreement.
Morgan Stanley acted as lead financial advisor to ON Semiconductor, with J.P. Morgan Securities also advising. Qatalyst Partners advised Synaptics on the transaction.
ON stock had gained 119% year-to-date coming into Friday’s session, largely driven by broader semiconductor sector multiple expansion rather than direct AI revenue growth.
The deal remains subject to customary closing conditions, with a mid-2027 expected close date.
🚨 Our JUNE Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for June, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for 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
