Texas Instruments Announces Acquisition of Silicon Labs for $7.5 Billion

This acquisition is poised to create a global leader in embedded wireless connectivity solutions. Texas Instruments intends to leverage Silicon Labs' robust portfolio and expertise in mixed signal solutions, combining it with its own leading analog and embedded processing technologies. The merger aims to enhance innovation and expand market access, ultimately accelerating growth in a rapidly evolving industry.

Haviv Ilan, chairman, president, and CEO of Texas Instruments, articulated the significance of this acquisition, stating, “The acquisition of Silicon Labs is a significant milestone that strengthens our long-term embedded processing strategy.” He emphasized that the combination of both companies would enable Texas Instruments to better serve its customers with dependable supply and enhanced technology.

Matt Johnson, president and CEO of Silicon Labs, echoed this sentiment, highlighting the shared heritage and commitment to building technology companies in Texas. He noted Silicon Labs' impressive double-digit growth over the past decade, attributing it to the increasing demand for connected devices. Johnson expressed optimism about the future, asserting that this merger would position the combined entity for accelerated innovation and a broader customer reach.

The transaction is expected to yield several strategic and financial benefits:

The merger will strengthen Texas Instruments' position as a leading provider of embedded wireless connectivity solutions. By adding approximately 1,200 products that support various wireless standards and protocols, the combined company is well-positioned to capitalize on the growing demand for connected devices.

Texas Instruments plans to reshore Silicon Labs’ manufacturing from external foundries to its own facilities, leveraging its low-cost manufacturing capacity. With 300mm wafer fab facilities in the U.S., the integration is set to enhance efficiency and reliability in production, ultimately benefiting customers through dependable supply.

The acquisition will deepen customer engagement through Texas Instruments' extensive market channels, experienced sales force, and advanced e-commerce capabilities. Silicon Labs' history of approximately 15% compound annual revenue growth since 2014 is expected to benefit from increased customer access and cross-selling opportunities.

Texas Instruments anticipates generating around $450 million in annual manufacturing and operational synergies within three years after the transaction closes, further enhancing the financial viability of the merger.

The definitive agreement has received unanimous approval from the Board of Directors of both companies. Under the terms, Silicon Labs stockholders will receive $231.00 in cash for each share they hold at the time of closing. Texas Instruments plans to fund the transaction through a combination of cash on hand and debt financing. Importantly, the deal is not contingent on financing.

The acquisition is anticipated to close in the first half of 2027, pending regulatory approvals and customary closing conditions, including stockholder approval from Silicon Labs. Post-closure, Texas Instruments expects the transaction to be accretive to earnings per share, excluding transaction-related costs.

To discuss the transaction and address investor questions, Texas Instruments will hold a webcast on the same day at 7 a.m. Central time. Investors are encouraged to participate to gain insights into this transformative acquisition.

Both Texas Instruments and Silicon Labs have emphasized their commitment to providing value to shareholders, with Texas Instruments reaffirming its strategy to return 100% of free cash flow over time through dividends and share repurchases.

This acquisition marks a pivotal move for Texas Instruments, further solidifying its leadership in the semiconductor space while expanding its capabilities in wireless technology. As the demand for connected devices continues to rise, the combined expertise of Texas Instruments and Silicon Labs positions them for significant growth and innovation in the years to come.