RF Micro Devices and TriQuint Semiconductor, which make radio frequency chips, announced a merger of equals on Monday, creating a chip maker with more than $2 billion in annual revenue.
Under the all-stock deal, TriQuint shareholders will receive 1.675 shares of the combined company for each of their shares while RF Micro shareholders will receive one share. That represents an implied price of $9.73 for each TrinQuint share, or about $1.6 billion, a 5.4 percent premium over the closing price on Friday, the companies said in a statement.
The deal is expected to save at least $150 million in costs, the companies said.
The chief executive of RF Micro, Bob Bruggeworth, will be chief executive of the combined company, which will have a new name. TriQuint’s chief executive, Ralph Quinsey, will be non executive chairman.
“The world’s demand for mobile data is growing exponentially,†Mr. Bruggeworth said in the statement. “With this merger of equals, we will bring under one roof all of the critical R.F. building blocks necessary to innovate at the heart of what makes mobile mobile - the crucial back-and-forth data flow between the mobile device and the network.â€
Mr. Quinsey added: “I believe this is an industry shaping event. Through this combination of RFMD and TriQuint we form a diversified market leader with a highly compatible combination of products and technologies and a world class team focused on innovation and superior financial results.â€
Bank of America Merrill Lynch was the financial adviser to RF Micro, while Goldman Sachs advised TriQuint.
