he could shift some of maxim's capacity into analog devices.t can improve the margins over the long-term. if you look at the scale benefits, there is a margins benefit to it as well. that should start reviewing itself over the next three to five years. alix: a big part of this is to compete with texas instruments. the fed view analog against ti right now? >> if you think about the analog sector, ti is the 300 pound gorilla. that being said, it is the farm number two vendor. if you're looking for an alternative, analog devices should be there. the chinese caused problems in the past with such deals, do you think we will see issues around this one? >> they are hoping for a mid-2020 deal close. will the current administration stay? i think that plays a role. will there be a new administration. betweentical climate the two countries is still he did. i would not be surprised if there is a delay in the -- he ated. i would not be surprised if there was a delay in the deal. ofx: do we see that type premium, also? >> if we look at multiples, they are el

we mentioned analog devices and maxim up here at the open. current quarter guide. we'll check in with the ceo of adi on that deal next. so i'm gonna hold on promoting you this quarter. cool? drop the taco. get in the car. does this sentra feel like a compromise to you? wait, what...? the handling is good, right? no compromise there. nope! watch this... umm... b-brie...brie brie! rear automatic braking. so if this nissan sentra isn't gonna compromise, why should you? you're right! atta girl. the all-new nissan sentra. with more standard safety features than any other car in its class. >>> joining us now very nice to have you with us this morning, vincent. let me start with the basic question, which is why is this deal good for your shareholders, good for your customers and employees? >> good morning and thanks for having me. we focused on building the -- our customers are asking us to do more and more in this particular view, squal will matter. we get more technology, more talent and we get more products, quite honestly, to sell as well. i ten

and a activity picking up with analog devices offering it to buy integrated and on top of that we can say that pepsi earnings were bad but not as terrible as where respected let's see what happens now with the big banks for the rest of the week but the consensus is already bracing for itself or for a 44 percent drop in aran in seeing the s. and p. 500 in debt 2nd quarter but then we have to have in mind also that california announced closing obama ours an indoor restaurant because of the increase in cases of covered 19 and tech stocks especially that the usual suspects such as aapl or amazon or we have been basically the main drivers have for their current rally started to fall and. demanding dick says that with them that said we have to keep in mind that the s. and p. $500.00 replete turned positive for the year and as you mention and. up nearly 16 percent so far in 2020 as a lisa thanks for keeping on top of that for us us a financial correspondent in new york. now to some of the other global business stories making the news the middle east oil producers are expected to make $270000

of berkshiretion hathaway, of analog devices, can they be supportive fo equity markets? mike: i think markets were left focus -- were less focused on the m&a story. equities.edit over we see the policies in place, especially from the fed looking ahead, continuing to be a strong, resilient source of credit support. we continue to like the up in quality equity marketplace. tech, pharma. those strong business models. we think those will continue to be rewarded in the u.s. even as we see those increased headwinds for the equity market overall. lisa: people agree with you with perspective credit. we see money filing into investment grade, and yet the fed is paring back some purchases of corporate debt. their balance sheet has actually shrunk. we are heading into a slew of expected bankruptcies. why go along credit now? mike: we continue to see the fed backstops as extraordinarily credible on the credit market side. one of the things that has been striking is just how little to date the fed has had to do, to your point. but because of the credibility and size of those backdrop

that was analog devices ceo vincent roche. nearing the $10 trillion mark. a look at whether chinese marks will have that milestone five years after the country's biggest market crash. this is bloomberg. ♪ shery: you are watching daybreak australia. let's get a quick check of how the markets are trading and turn to sophie in hong kong. sophie: with politics and trade in the mix along with the latest on the virus, it may be difficult for markets to find direction. california's move to reverse some of its reopening measures as sentiment in asia. futures are mixed. slightly higher by one third of 1%. offshore yuan is hovering around 7. the aussie dollar holding a three-day drop ahead of chinese trade data due later this morning. over in the commodity corner, i want to keep an eye on copper. this as speculative have fueled the rally along with other factors. money managers have boosted their net bullish position on copper to a two-year high. switching out the terminal, the red metal has extended an eight week winning streak in lending, the best run since 2017. t

fact the biggest deal of the year it was just announced this was over the weekend a semi maker analog devices has agree now to buy rival maxim integrated products for about $21000000000.00 what's the latest there so analysts are expecting that this is actually going to be the biggest deal of the year and this comes just as the entire semiconductor makers seek to scale and diversify their offerings just as apple dealt a major blow to intel by cutting off all of their chips so analog chips they're more photos more cell focused on computing whereas macs and so i mean they're used in settings from health care to autos so where analog does not have a really large presence so this merger is actually quite synergistic now under the terms of this deal 80 i will acquire all of maxim and all stock transaction that will value the combined enterprise at a total of $68000000000.00 so management expects this transaction to be a creative within 18 months subsequent to closing with about $275000000.00 of cost synergies by the end of year $2.00 driven by lower operating expenses so that is if this merger gets

maxim being acquired for analog devices to create a $600 billion chip behemoth.carlet fu has more details. >> this is a deal to add skill. it brings together the number two and number three players in the chip space to create a star competitor to texas instruments. considered onee of the more boring corners of the semiconductor market. real-world signals like temperature and sound into digital data. sectors tend to be a source of a lot of the man, but they are under pressure given the slow down in the global economy. when that happens, orders slow down over all. that is a contrast to a company like nvidia, which makes chips for gaming and the cloud. analog chips are fairly cheap to make. as a result, they have some pretty fat profit margins come around 65%. they are cheap to make, and they have a long shelf life as well. they don't need to be updated on an annual basis. fascinating deal and they are two of the largest players already. what is the likelihood for any kind of a bidding more? >> this is one of the biggest deals out there. whoever comes in would have

shares and analog devices are also up about 1% here. but look as everything is becoming a smart device, ship makers need to scale and merging is one way they can do it in better compete with texas and -- cheryl back to you. cheryl: lauren simonetti thank you very much. leetle move our focus from mergers to earnings looking at futures this morning. and as you can see we've got the dow up 138 nasdaq up 58 and half s&p up 13 and a quarter. investors are focusing on quarterly results this week from big banks including jpmorgan, city wells fargo and goldman sachs second quarter expecting to show covid covid-19 still affecting our markets bring strategist also joining the confers for the show for the three hours we've got and pollster and president lee carter is with us senior fellow with national taxpayer union and maddy, and real clear politics cofounder president tom bevin. guys good morning to all of you. >> good morning, cheryl. well we have a lot to talk about and start with you because, obviously, earnings that is kicking off this week

. >> you can't forget analog devices. that is a big, big deal. there is a lot of big things going on it is quite a bit higher you see some follow along impact the broader markets, as you mentioned, also in the green been that let's bring in the cofounder and managing director of sun group good monday morning, guys. >> good morning. >> i know that chips are not, of course, a specific coverage area this is a big deal at a very confusing time for many in the market what do you take awa from a move like this and what sorts of changes or adjustments do you see? >> it is very, very interesting. we're in the middle of a pandemic, but it dung change the fact that a lott of companies are doing deals and acquisitions there is still strength and still a lot of people making money in this market there is an area that we need to participate in, talk to our clients about actively and want to move some and shift some cash over to different areas to make sure that we also participate. >> often when things happen like the nasdaq getting into new territory like th

analog devices is buying maxim integrated worth $21 billion. maxim popping 17% premarket. stay tuned, "squawk box" will be right back achievable steps along the way... ...so we can spend a bit now, knowing we're prepared for the future. surprise! we renovated the guest room, so you can live with us. oooh, well... i'm good at my condo. oh. i love her condo. nana throws the best parties. well planned, well invested, well protected. voya. be confident to and through retirement. simon pagenaud takes the lead at the indy 500! coming to the green flag, racing at daytona. they're off... in the kentucky derby. rory mcllroy is a two time champion at east lake. touchdown! only mahomes. the big events are back and xfinity is your home for the return of live sports. >>> welcome back to "squawk box. after more than two decades ford bringing back an iconic brand, the bronco they're hoping this will give them a bigger piece of the suv market ford has a lot riding on the strategy phil lebeau joins us now phil, you know what i think of when i think of the bronco, right? >> reporter: yeah.

analog devices has agreed to buy maxim integrated products. the deal has an equity value of $20.9 billion. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ >> if we see a face for deal -- deal, we will see pushback there. jonathan: in your equity market this morning, good morning to you all. equities higher on the s&p as we kick off earnings season tomorrow and through the week, with the big financials and big tech in focus this morning. a series of upgrades helping to drive some of the big names this morning. futures up 0.7%. alongside tom keene, together with lisa abramowicz, i'm jonathan ferro. that's where the focus is, the next steps from fiscal authorities. tom: no question about it, but also the monetary update. there is important decisions this week. there's a webinar with francine lacqua and the government are of the bank of england and president of the new york fed. michael mckee, our international ec

it's analog devices. not a name that we talk about a lot but we're talking about it now. it was in a deal to buy maxim integrated products. the deal that could be announced as soon as today would rank as one of the year's biggest takeovers after months of rather lackluster activity because the pandemic would also follow a recent flurry in the wake of uber $2.5 billion deal and the nearly $10 billion take over of dominion energy natural gas assets we're watching that. meantime, the story to watch right now is not here. it is in china because that market remains red hot their nasdaq if you will, the tech heavy shen zen index. all the more often talk about shanghai composite was up nearly 2% any local investors in china quoted as saying things like it's an i can't lose kind of market but others are more worried about a 2014 like bubble you think our market has been hot? look at china up again. >> let us stay state side for now and try to understand why stocks keep going up earnings estimates keep coming down we're joined by victoria answer the question i just layed out. earn

semiconductor maker analog devices buying rival maxim for $21 billion. they are betting the all stock deal will boost market share in both 5g and automotive chip markets. cars right now are like iphones on wheels at this point. so the $78.34 a share offer is a 22% premium of maxim's friday close. that looks to be certainly generous because the stock of maxim right now is at $70.73. all right. >>> have you stood in a line at costco lately? maybe you should line up for the stock. today it's not really doing that much, but it is very close to its 52-week high and at this hour, atlantic equities has initiated coverage with an overweight rating and a $375 price target. atlantic believes the warehouse retailer can count on stable profits thanks to membership fees. costco down a third of a percent right now. >>> elon musk scrambling over warren buffett's shoulders to climb another rung of the billionaire boys club, all tied to tesla stock which right now up 2.25%, is hitting a new record. it's at $1,577 a share. a market cap now at more than $320 billion. tesla

like so many other things everybody is adjusting you heard earlier this week when we had analog devicesthe ceo indicated that entire deal had been done virtually. he did have a relationship with maxim ceo but i'm hearing that more and more. there is a willingness to move forward with major transactions where none of the principals get in a room together it is the current reality. jim, to your point, it just indicates behaviors change and willingness to engage in these things changes in terms of people staying home. >> yet at the same time the nasdaq where there's so much technology that's meant to be able to make it so that you can do that, whether it be the zoom or whether it be the cyber -- we will have to talk about cyber attacks, it's relentless the selling in the nasdaq, the dow is doing so much better and the nasdaq is the repository that makes it so you can do those deals. carl, what it shows you is i think right now the market, the big buyers, have had it with the idea that the nasdaq is so much better and when you start doing this price to sales, peloton downgrade today, price

before that, all stock deals were popular during the dot-com boom some of all stock deals is analog devicesnd maxim and chevron and noble energy now in periods of uncertainty, it may be prudent for dmpz to conserve their cash rather than use it for deals or on things like buybacks. couple that with lofty levels in the markets, the ceos are becoming more inclined to use stock as a currency for deals especially if they feel the stock prices were fully valued guys >> leslie, thank you very much for that mike, i mean clearly you could get the sim wiple conclusion th stock market values are stretched. as leslie points out if, a company went out and used the cash balance to buy someone at this stage, they would be met with way shareholder revolt. >> right yeah certainly companies are a little more protective of their cash cushion on their balance sheets. although, on the other hand, debt is almost free for a lot of companies. so the market is almost begging them to use cash in some respect. the other thing i mention it is requires that the target company accept the acquiring companies equity in a

devices. scalia said yes, but there was an analog. and alito says, these devices would have to be small. you have them agreeing that the fourth amendment up guys, but not for the same reason. justice black toward the end of the career was being very rigid about it. he was not able to see conversations for their digital effects, and for that reason it was noble, but not in the end, a very influential dissent. susan: december 19, 1967, here are the headlines on the decision in this case. -- the supreme court will set bugging is subject to legal safeguards, that from the l.a. times. how significant, we look at these as landmark cases, how significant wasn't sorry, was it seen in society at the time? >> i was a big deal because a change that law, and changed it in the weather was important. because at that point, these devices are just becoming into vogue among it wasn't your of surveillance. >> it has been around for a while, but this is an important way that the government found evidence. a way to obtain criminal evidence by the government, and also national security evidence. on terrorist

devices. there were none. scalia said yes but there is an analog, a tiny constable hiding under the carriage at the time of the drafting and eavesdropping. you need a thousand constables that have to be very small constables or a very large carriage. here you have the two conservative justices one an originalist the other not agreeing the fourth amendment applied but not for the same reason and justice black was toward the end of his career and being very rigid -- he wasn't able to see conversations as digital effects and for that reason wrote a noble but not in the end very influential dissent. >> let's look at a number of headlines. from december, 1967 on the decision in this case "the los angeles times" headlines "supreme court rules bugging is subject to legal safeguards" and in the "new york times" "high court eases curbs on bugging, adds safeguard" insist police must obtain warrant to act. doesn't forbid eavesdropping. we now look at this as a landmark case. how significant was it seen in society at the time? >> i think it was a big deal because it really did change the law and it also changed it in a wa

devices. scalia said yes, there is an analog a tiny constable hiding under the carriage and eavesdropping. you need a thousand constables to get a gps device and ought to be very large constables and here you have these two justices agreeing that the fourth amendment applied and justice black there was toward the end of his career and he wasn't able to see conversations as digital effects and for that reason wrote noble, but not in the end very influential dissent. >> let's look at a couple of headlines from december 19, 1967, of the decision in this case. "the los angeles times" headline. supreme court rules bugging is subject to legal safeguards. in "the new york times" high court eases curbs on bugging and insists police must obtain warrant to acts and doesn't forbid eavesdropping. we how significant was it seen in society at the time? >> i think it was a big deal because it really did change the law and it also changed the way it was important because at that point these devices were just coming into vogue. this was the new era of electronic surveillance and they'd been around for a whi