Report suggests that Analog Devices is in talks to acquire Maxim for over $17 billion.

According to sources, semiconductor manufacturer Analog Devices Inc. is in talks to acquire competitor Maxim Integrated Products Inc. for approximately $20 billion, making it one of the largest M&A deals this year. Analog and Maxim are discussing an all-stock deal, with the deal possibly being finalized as early as Monday, though this is not guaranteed, and negotiations could still break down. Maxim's current market value is around $17 billion.

One source said that if the deal goes through, Maxim shareholders would own about 30% of the combined company, with a valuation including debt slightly below $70 billion.

In the world where more and more daily items, from cars to washing machines, are becoming connected to the internet through chips, there has been a series of activities in the semiconductor industry as chip manufacturers seek to scale up and expand their product portfolios. Maxim¡¯s semiconductor products are widely used in various fields such as industry, automotive, and healthcare. The company was founded in 1983 and headquartered in San Jose, California.

Analog has a market capitalization of around $46 billion and is headquartered in Norwood, Massachusetts. The two companies have been in intermittent talks for years.

Both Maxim and Analog are major players in the analog semiconductor field, which is used for power management in automotive batteries and other areas. Their combination would create a stronger competitor for Texas Instruments, which is the leader in the analog semiconductor field and has a market cap of $119 billion. Analog would also gain Maxim's team of hardware engineers.

According to Dealogic data, this would be the largest M&A deal in the US so far this year. Since mid-March, the COVID-19 pandemic has caused many companies to put their merger plans on hold, and global deal volumes have declined, but there are signs of a recovery recently. According to The Wall Street Journal on Sunday, a blank-check company plans to acquire healthcare service provider MultiPlan for about $11 billion, including debt. However, global M&A deals from 2020 to date are still down about 50% from last year.

For years, the chip industry has been a reliable source of deals. Just over a year ago, German chip maker Infineon Technologies AG agreed to acquire Cypress Semiconductor Corp. for €8.4 billion, highlighting the inherent complexity of regulatory scrutiny in semiconductor transactions, which was just completed in April.

Similarly, last year, NXP Semiconductors NV agreed to acquire Marvell Technology Group Ltd.¡¯s Wi-Fi and Bluetooth connectivity product lines. On Semiconductor Corp. also reached an $1.1 billion deal to buy Quantenna Communications Inc.

Any deal between Analog and Maxim could require approval from US, Chinese, and EU regulatory bodies.