(Reuters) - Chipmaker Littelfuse Inc said on Monday it would buy peer IXYS Corp for about $750 million in cash and stock as the company expands into the lucrative automotive market.
IXYS shareholders can elect to receive either $23 per share in cash or 0.1265 of a share of Littelfuse common stock.
The deal value of $23 per share, represents a premium of 44 percent to IXYS’s close on Friday.
In its biggest deal ever, Littelfuse expects to achieve more than $30 million of annualized cost savings within the first two years after the close of the transaction.
The transaction is expected to close in the first calendar quarter of 2018.
The deal is the latest example of M&A activity among chipmakers getting into the automotive market.
Earlier this year, Intel Corp agreed to buy Israeli autonomous vehicle technology firm Mobileye for $15.3 billion.
Last year, chipmaker Qualcomm Inc agreed to buy NXP Semiconductors NV for about $38 billion, making it the leading supplier to the fast-growing automotive chips market.
Morgan Stanley & Co LLC served as financial advisers to Littelfuse, while, Needham & Company LLC advised IXYS.
Wachtell, Lipton, Rosen and Katz provided legal counsel to Littelfuse and Latham & Watkins LLP counseled IXYS.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shounak Dasgupta