Silicon Lab's Stock Is Trading Higher On Skyworks $2.75B Acquisition Of Infrastructure & Automotive Business

Skyworks Solutions Inc SWKS inked an agreement to acquire the Infrastructure & Automotive business of silicon, software, and solutions provider Silicon Laboratories Inc SLAB in an all-cash consideration of $2.75 billion.
The acquisition will fast-track Skyworks’ expansion into growth segments like electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication, data center, automotive, smart home, and other applications.
The arrangement will enable Skyworks to tap an annual combined market opportunity potential of $20 billion.
Silicon Labs SVP Mark Thompson will join Skyworks under the arrangement, apart from 350 employees, including the senior management team of the business.
Skyworks expects the transaction to be immediately accretive.
The acquisition will be financed with a combination of cash and debt financing by J.P. Morgan.
This acquisition will largely expand Skyworks’ abilities across high-growth end markets, including automotive, communications, and industrial, creating new and highly compelling opportunities for Skyworks, CEO Liam K. Griffin said.
Skyworks held $1.02 billion in cash and equivalents as of Jan. 1, 2021.
Price action: SLAB shares traded higher by 17.6% at $170.1, SWKS shares traded higher by 4.13% at $191 in the premarket session on the last check Friday.