MaxLinear Tanks 15% Following Decision To Buy Silicon Motion

Shares of American hardware company MaxLinear, Inc. (MXL) are trading down 15 percent on Thursday's trading after the company announced a deal with Taiwan-based Silicon Motion (SIMO) under which MaxLinear would acquire Silicon Motion in a cash and stock transaction that values the latter at $3.8 billion and the combined company at $8 billion. In Thursday's pre-market trading, the stock was down 12.9 percent from the previous close.

The merger is expected to expand the combined company's total addressable market to $15 billion, with revenues of more than $2 billion. It is also expected to generate annual run-rate synergies of at least $100 million, to be realized within 18 months after the transaction closes. The acquisition is expected to add to MaxLinear's earnings.

Currently at $44.78, the stock has traded between $31.76 and $77.89 during the past 52 weeks.

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