American chipmaker Maxim Integrated Products Inc.’s share price jumped to a 17-year high today rumors that it’s holding talks to be acquired for $20 billion by its Japanese rival Renesas Electronics Corp.

News of the potential acquisition was first reported by CNBC, citing several sources close to the matter, who asked not to be named because the discussions are private. However, Renesas later denied a deal is in the works, according to Bloomberg. “There were reports of merger discussions today, but that was not announced by us and isn’t factually true,” Renesas reportedly told the Tokyo Stock Exchange.

Maxim’s share price rose 12.3 percent to $66.27 at close of trading on Monday, it’s highest since October 2000, following CNBC’s report. At one stage, the company’s shares had gained as much as 27 percent.

Renesas specializes in building semiconductor chips for the automotive industry, but more recently it has extended its focus to include connected technologies and the “internet of things” because of rapid growth in those sectors. Renesas facilitated its entry into these markets with the $3.2 billion acquisition of another semiconductor firm, U.S.-based Intersil, last February. At the time of that acquisition, it was said that Maxim had made a competing offer to acquire the American firm, only to lose out to Renesas.

Maxim itself has appeared keen to find a buyer for some time. The company is said to have held talks with companies including Analog Devices Inc. and Texas Instruments Inc. over a possible acquisition in recent years, but those discussions came to nothing.

Despite Maxim’s enthusiasm to find itself a buyer, it could well end up disappointed again, according to one analyst who expressed doubts over the practicality of an acquisition. Rob Enderle, principal analyst of the Enderle Group, said Renesas may not be able to come up with an offer that satisfies Maxim, as the American firm has had issues in the past regarding a reasonable valuation. He also expressed fears that the cultural differences between the two companies could spell doom for any merger.

“This has the earmarks of an ugly acquisition,” Enderle said. “Not only will getting to a price both firms can agree on be difficult, but execution could be a nightmare both because Renesas hasn’t settled post Intersil yet and because of the huge cultural differences likely between the firms.”

Renesas’ reported bid for Maxim comes amid a wave of consolidation in the chip-making industry driven by scale efficiencies, increasing demand from car companies and the rising costs of chip fabrication, CNBC reported. Seven deals worth $12 billion or more have been completed in the past three years, though the pace of transactions slowed down significantly in 2017.

Image: Renesas/Facebook