onsemi Raises Synaptics Bid to $123 Cash After Rival Offer

onsemi (ON) replaced its Synaptics (SYNA) all-stock deal with $123 a share in cash, about $5.7B, after a rival bid. ON shares rose 6-8% and Synaptics 14-15%.

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What Did onsemi Change in the Synaptics Deal?

onsemi swapped a fixed share exchange for a fixed cash price. The June agreement gave Synaptics holders 1.35 onsemi shares for each Synaptics share, valuing the company at about $7B. onsemi stock stood near $118.74 at that announcement.

The onsemi share price later slid to roughly $80. At that level, the original exchange ratio implied a value near $108 per Synaptics share. The $123 cash price sits above that figure and removes exposure to onsemi's share price.

The financing includes cash on hand and committed debt. That debt includes a fully committed senior secured term loan of up to $2.45B from Morgan Stanley (MS). The transaction has no financing condition. The Synaptics board approved the amended agreement unanimously.

Who Was the Rival Bidder?

The challenger was an unnamed strategic party. Synaptics disclosed that it received an unsolicited, non-binding proposal from this party on September 2, 2026, for all outstanding shares.

The board first determined that the proposal constituted a superior proposal under the merger agreement. That finding gave onsemi a window to respond. After further negotiation, the board concluded that onsemi's revised terms no longer left the rival offer superior, and it reaffirmed onsemi as the buyer.

Why Did Synaptics Shares Jump More Than onsemi's?

Synaptics holders gained both a higher implied price and certainty. A cash offer of $123 fixes the payout. The earlier structure moved with every change in onsemi's stock, which had fallen by about a third since June. The rival bid also raised the possibility of a further contest, which supported Synaptics shares.

onsemi's gain reflects a different calculation. The all-cash structure removes the share issuance that would have diluted existing holders. It also lowers the headline price by roughly $1.3B and keeps the deal's earnings accretion intact. The company has also pointed to $200M in annual run-rate cost synergies, plus additional revenue synergies. It expects to bring Synaptics production in-house after the first 18 months following the close.

Strategic Context

Synaptics supplies human-interface and connectivity chips for consumer, PC and Internet-of-Things devices, and has leaned into edge AI processing. onsemi is best known for power and sensing chips for automotive and industrial customers. The combination broadens onsemi's reach beyond those end markets. It also increases the leverage on onsemi's balance sheet. Cash funding trades equity dilution for debt service.

What Comes Next for the Deal?

The deal now needs Synaptics shareholder approval and the remaining regulatory clearances. The US Federal Trade Commission has cleared the transaction, according to the companies. Other jurisdictions are still reviewing it. Closing is targeted for mid-2027.

The unnamed rival bidder retains the option to return. The amended agreement, however, now carries a board finding that the onsemi terms are in shareholders' best interests. That makes a topping bid harder to advance. The key variables are the timing of overseas approvals and onsemi's ability to carry the added debt through the closing period.

Outlook

The revised offer converts a deal exposed to onsemi's falling share price into a fixed $123 cash payout and fends off a strategic challenger. Synaptics holders receive price certainty, and onsemi avoids dilution at a lower total cost of about $5.7B. Regulatory approvals and the shareholder vote will determine whether the mid-2027 close holds.