Silicon Motion Rejects MaxLinear’s Purported Termination of Merger Agreement

Silicon Motion Technology Corporation issued a written notice to MaxLinear, Inc., in which it categorically rejected MaxLinear’s purported termination of the merger agreement, and the assertions made by MaxLinear, in its letter of July 26, 2023.

It will vigorously pursue its remedies, and reserves all rights under the agreement and otherwise, including but not limited to the right to hold MaxLinear liable for substantial damages.

A copy of Silicon Motion’s notice to MaxLinear is attached as Annex A below.

Dear Mr. Litchfield,

I write on behalf of Silicon Motion Technology Corporation in response to your July 26, 2023 letter in which MaxLinear, Inc. purports to terminate the Agreement and plan of merger dated as of May 5, 2022 by and among Silicon Motion, MaxLinear, and Shark Merger Sub (the “Agreement” and the merger contemplated therein the “Transaction”).1
  
MaxLinear’s supposed grounds for terminating the Agreement are baseless and sheer fiction. It is obvious that it has manufactured excuses to try to get out of its binding agreement.
MaxLinear’s wrongful termination of the Agreement is a Willful and Material Breach.

Additionally, MaxLinear’s failure to close by August 7, 2023, will constitute a separate Willful and Material breach of its obligations under the Agreement to close by August 7, 2023.  

These Willful and Material breaches of the Agreement entitle Silicon Motion to, among other things, substantial damages.

It is significant that your letter does not provide the facts to support the claims that Silicon Motion breached the hodgepodge of sections that your letter cites.

As you are aware, changes in the general economy or the microchip industry do not give MaxLinear an excuse to walk away from the binding Agreement.

Moreover, the fact that in the nearly 15 months since the parties signed the Agreement, MaxLinear did not notify Silicon Motion of its purported breaches is the clearest admission that there are none, and that you know that.

This is not an exhaustive list of the reasons why MaxLinear’s purported termination of the Agreement under Sections 7.1(g) and 7.1(d) of the Agreement is utterly baseless.

Silicon Motion will vigorously pursue its remedies, and reserves all rights under the Agreement and otherwise, including but not limited to the right to hold MaxLinear liable for substantial damages.

Sincerely,
        
Wallace Kou, president and CEO, Silicon Motion Technology Corporation

1 Unless otherwise noted, all capitalized terms have the same meaning as in the agreement.