Semiconductor maker Analog Devices Inc. will acquire rival Maxim Integrated Products Inc. in an all-stock deal that values the combined enterprise at more than $68 billion.

Under the terms of the agreement, Maxim stockholders will receive 0.630 of a share of Analog Devices for each Maxim share held at the closing of the transaction. Upon closing, Analog Devices shareholders will own about 69% of the combined entity, with Maxim shareholders owning the rest.

The deal is estimated to result in $8.2 billion in revenues and $2.7 billion in free cash flow on a pro forma basis. The transaction is expected to be accretive to free cash flow at close and to adjusted EPS in 18 months.

It is projected to generate $275 million in cost synergies by the end of year two subsequent to closing, with additional cost synergies from manufacturing optimization expected by the end of year three.

The transaction, approved by the boards of both companies, is expected to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Maxim President and CEO Tunç Doluca will join the ADI board.

The deal is estimated to close in summer 2021 subject to customary closing conditions, including receipt of U.S. and certain non-U.S. regulatory approvals and approval by stockholders of both companies.

Morgan Stanley was lead financial adviser to Analog Devices, with BofA Securities also serving as a financial adviser. Wachtell Lipton Rosen & Katz acted as legal counsel for Analog Devices.

J.P. Morgan was exclusive financial adviser to Maxim and Weil Gotshal & Manges LLP served as legal counsel.