Just before the silly season opened, there was a final flurry of activity in the electronics sector, with Analog Devices making a seemingly successful $14billion plus bid for Linear Technology, with Avnet then topping Datwyler’s bid for Premier Farnell by 12%.
With the cost of borrowing currently very low and with many companies sitting on large piles of cash, it’s no surprise to see such activity. The Analog/Linear deal is surprisingly complementary, with little overlap in product portfolios. Both companies product lines are well respected and their combination is likely to promote Analog to the second largest player in the field.
Avnet and Premier Farnell is different. One of the weaknesses, if you can call it that, of the broadliners is the ability to get involved early in the design phase. The so called ‘high service’ organisations are geared up to stock a wide range of components, but in small quantities. They also play a vital role in new product introduction; getting the latest technologies under engineers’ noses. Broadliners, by contrast, keep larger quantities of a narrower product range and are geared more towards production.
By getting its hands on Farnell, Avnet gets access to demand creation. Integrating the two very different businesses could be interesting, however.
