Silicon Laboratories' share price gained as much as 12% this morning, but the tech stock leveled off a bit a few hours later and was up 8% as of 11:37 a.m. EDT. Skyworks' stock gained about 4% on the news.
Silicon Laboratories said that it will sell its infrastructure and automotive business for $2.75 billion and return about $2 billion of that to its shareholders after the all-cash deal closes.
The sale will give Skyworks all of Silicon Laboratories' "power/isolation, timing and broadcast products, intellectual property and associated employees," the company said.
Skyworks' CEO Liam Griffin said in statement, "This acquisition will broadly expand our capabilities across high-growth end markets including automotive, communications and industrial, creating new and highly compelling opportunities for Skyworks."
Silicon Laboratories says that after taxes and transaction fees, the company expects the net proceeds from the sale to be $2.3 billion. The company will then return about $2 billion to shareholders through a combination of special dividends and/or share repurchases. The company expects the deal to close in the third quarter of this year.
Silicon Laboratories investors have already been optimistic about the company's prospects and have pushed the company's share price up 75% over the past 12 months. And this latest news, which should add more value to shareholders, gives investors even more reason to like Silicon Laboratories' stock right now.