US chip-maker Texas Instruments (TI) has announced an agreement to acquire rival National Semiconductor, which will bring together two industry leaders in analog semiconductors.
The boards of both companies have unanimously approved the transaction, under which TI will pay $25 per share for each National share.
The highly fragmented market for analog semiconductors was $42 billion in 2010, with TI the market leader with 14 percent of the market. National's revenue in calendar year 2010 was about $1.6 billion, or 3 percent of the market. Analog chips are widely used in mobile phones and other electronic equipment to connect and/or regulate data such as sound, temperature and light.
"This acquisition is about strength and growth," said Rich Templeton, TI's chairman, president and CEO. "National has an excellent development team, and its products combined with our own can offer customers an analog portfolio of unmatched depth and breadth.”
National's management team had done an outstanding job of improving margins and streamlining expenses in recent years, he added, and the acquisition would accelerate National's growth through TI’s much larger sales team exposing its product portfolio to more customers in more markets.
"Our two companies complement each other very well," commented Don Macleod, National's CEO. "TI has much greater scale in the marketplace, with its larger portfolio of products and its large global sales force. This provides a platform to enhance National's strong and highly profitable analog capability, power management in particular, leading to meaningful growth."
After closure of the transaction, National will become part of TI's analog segment. Its headquarters will remain in Santa Clara, California, and TI will continue to operate National’s manufacturing facilities in Maine, Scotland and Malaysia.
The transaction is expected to close in six to nine months.
