ON Semiconductor's revised Synaptics deal improves earnings outlook, says BofA

What Brokers Say Tech Edited by: Angela Harmantas 13:31 Fri 02 Oct 2026 --> Disclaimer No investment advice About this content Editorial Standards & Policies Share article About this content × About Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Proactive news team spans the world’s key finance and investing hubs with bureaus and studios in London, New York, Toronto, Vancouver, Sydney and Perth. We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Use of technology Proactive has always been a forward looking and enthusiastic technology adopter. Our human content creators are equipped with many decades of valuable expertise and experience. The team also has access to and use technologies to assist and enhance workflows. Proactive will on occasion use automation and software tools, including generative AI. Nevertheless, all content published by Proactive is edited and authored by humans, in line with best practice in regard to content production and search engine optimisation. ON Semiconductor's revised Synaptics deal improves earnings outlook, says BofA Published: 13:31 02 Oct 2026 EDT ON Semiconductor’s revised $5.7 billion acquisition of Synaptics could deliver a bigger earnings boost than originally expected while eliminating the share dilution that had weighed on the deal, Bank of America said. Following an unsolicited competing proposal, the companies amended their June 25 agreement to replace the all-stock transaction with a $123-per-share cash offer. The deal's aggregate value falls to approximately $5.7 billion from $7 billion, eliminating roughly 59 million additional shares and the previously contemplated 12% to 13% dilution. With ON Semiconductor shares down 32% since the deal's announcement, Bank of America wrote that revised terms could improve investor reception by removing dilution while preserving the strategic rationale. ON Semiconductor would fund the deal with cash on hand and approximately $2.5 billion in term loan debt, with no financing condition. Even with that borrowing, the broker estimates the transaction could increase earnings per share by approximately 11% in calendar 2027 and 15% in calendar 2028. Its combined-company EPS estimates are $5 and $6.88, respectively, compared with standalone forecasts of $4.51 and $5.99. Those projected gains reflect an estimated 4% dilution and 2% accretion under the original structure, primarily from eliminating additional shares. The revised model includes cost synergies of $90 million and $175 million, respectively, partly offset by a roughly $150 million annual financial-income headwind from cash-and-debt funding. The estimates exclude revenue synergies and potential outsourcing benefits beyond the previously announced $200 million annual cost-synergy target, and management expects to outsource some SYNA production after the first 18 months following closing. The acquisition would also broaden ON Semiconductor's portfolio, with Bank of America highlighting SYNA's edge computing, connectivity, software, and human-machine interfaces alongside existing power and sensing capabilities. The broker expects the combination to support more integrated solutions across industrial markets, robotics, autonomous driving, and augmented and virtual reality. It estimates the acquisition would expand ON Semiconductor's calendar 2030 addressable market by approximately $30 billion to $243 billion. Bank of America still expects completion by mid-2027, with FTC approval received and other regulatory reviews ongoing. Continue reading