In a surprise move, Maxlinear has cancelled its close to US$4 billion takeover of Silicon Motion, despite having received approval by China to finally acquire Silicon Motion. The two companies started their merger back in May of 2022, but over a year later, Maxlinear has announced that it has "exercised its contractual rights to terminate its May 5, 2022 merger agreement". The announcement saw a drop in Maxlinear's shares of about 12 percent and a 25 percent drop for Silicon Motion.

It's unclear as to why Maxlinear cancelled the deal, but the two companies don't appear to have clear synergies outside some storage products. That said, Maxlinear appears to blame Silicon Motion in a press release that the company issues. Among other things, Maxlinear states that "Silicon Motion has suffered a Material Adverse Effect that is continuing, Silicon Motion is in material breach of representations, warranties, covenants, and agreements in the Merger Agreement that give rise to the right of the Company to terminate". As to what this actually means, we'll most likely never find out, but as Maxlinear also points out, the merger was supposed to have been finished by the 23rd of May 2023, which means Maxlinear had the right to cancel the merger regardless.