It’s been almost a year a year to the day (10th March) since Analog Devices announced that the company had completed its approximately $15 billion takeover of Linear Technology. The initial announcement had come as a shock to the industry, in that one of the seemingly few remaining large privately owned electronics companies had sold out. At the time, Analog Devices said that the two companies didn’t compete in either the product or customer space, so the acquisition was completely complimentary and no redundancies were foreseen. After a year, how has it all panned out?
Remarkably well according to Jackie Rutter, Director of Marketing for the EMEA region for Analog Devices, who I spoke to at this year’s Embedded World Exhibition in Nuremberg. The past year has been spent integrating the two companies and that has gone pretty smoothly, mainly because of the lack of overlapping competencies. When product areas were broken down, each area was almost completely dominated by a single company, making the integration of the companies much less contentious.
Even though the two companies made some apparently similar classes of products, the different areas they targetted meant that when the design teams got together they found that the techniques that each company used were completely different, allowing them to cherry-pick the best methods and implement them company-wide. Linear’s products have helped fill in the gaps in the Analog portfolio and that has allowed the company to move with the market towards a more solutions-based approach. Analog sales engineers can visit customers and offer a choice of products from the sensor across the whole signal chain instead of only selling certain parts. The company can also offer a wider range of power and wireless products to meet the demands of today’s industry.
It has not been all plain sailing. The biggest stumbling block during the integration was the stark cultural differences between the two companies, with Analog Devices being a more traditional corporate environment with a collaborative decision making process, while Linear Technology had a flatter structure where force of will was as important as diplomacy for seeing through projects and bringing new products to market. Those stumbling blocks have now been ironed out and everything seems to be running smoothly.
The result of the merger is that the sum of the two companies combined can offer more than the two individual organisations ever could. The demonstrations on Analog's stand at Embedded World were specifically chosen to highlight the synergy between the two sets of products, for example using Linear wireless and power components alongside Analog sensors and signal chain products to form independent sensor clusters for IoT applications.
It has only been a year since the takeover was completed, but the early signs look good for the company. It has allowed Analog to be in much better shape for future challenges by being able to offer components across the whole signal and power chain, which in turn has led to the company being less reliant on partners to fill those gaps. This philosophy makes customer support easier and minimises worries of breaks in the supply chain that are outside its own control. The initial news of the takeover raised a few eyebrows in the industry, but in practice it looks like it is working out pretty well so far.