Silicon Motion said it intends to enforce deal agreement with MaxLinear

Silicon Motion (NASDAQ:SIMO) said that MaxLinear’s (NASDAQ:MXL) decision to terminate its purchase agreement is invalid and that it intends to “vigorously” enforce its rights under the merger agreement. Silicon Motion fell 11% in premarket trading, while MaxLinear dropped 9% following 3Q guidance and results on Wednesday.

“MaxLinear’s eleventh-hour purported termination of its merger agreement with Silicon Motion is invalid and reflects a repudiation of MaxLinear’s obligations rather than any failure of Silicon Motion’s conditions to closing,” Silicon Motion (SIMO) said in a statement on Thursday.

The statement comes after MaxLinear (MXL) on Wednesday notified SIMO that it was terminating its $3.8 billion acquisition, saying that SIMO suffered a material adverse effect. The notification came after the companies won antitrust approval from China’s antitrust regulator.

Silicon Motion disagreed and said that it has “complied with its obligations under the agreement and has not suffered a material adverse effect,” the company continued in its statement. “Silicon Motion expects MaxLinear to abide by its obligation under the merger agreement and intends to vigorously enforce its rights under the merger agreement.”

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