Why Analog Devices Bought Linear Technology?

Linear Technology wasn’t planning to sell its business when Analog Devices made an offer worth $14.8 billion. The later wanted to take over the company along with its power management circuit designs library. The company recently announced the completion of deal that has been confirmed by board of directors of both companies. Currently, it is being reviewed by the regulators. Complete industry was under surprise when the deal came to light, there is hardly anyone who is not aware of LInear Technology’s disdain for corporate matchmaking engineering culture, and its dislike for analog design.

A lot of people reacted with a lot of criticism on this deal, they questioned the fate of new products, customer support, as well as famous LTSpice simulation software. The best answer to this confusion is the acute windfall that is being faced by this company’s shareholders. The deal accounts for 10 times of the revenue that company earned in year 2015. The amount accounts to be one of the highest ones that has been paid to anyone in last one decade. Shareholders will receive $46 and one-fourth of Analog device’s share for every single stock they surrender.

Robert Swanson, one of the founders of Linear technology in year 1981 and the executive chairman of the company, the price offered to them was too high to overlook.The best way was to accept the deal and reish the high profit margins being offered by Analog Devices. In his own words, “I think what pushed us over there was, frankly we are a public company. They have fiduciary responsibilities, and the offer was so compelling. It just turned out to the a deal e couldn’t turn down,” He further adds, “We talked extensively about what he’s paying for, and he understands that clearly. Our people are our most valuable assets. I am incredibly proud of Linear’s team, and I am gratified that Vince is well aware of how lucky he is to welcome them into the analog family.”