Analogous companies
Embedded chip giant Texas Instruments has announced it is acquiring National Semiconductor, in a surprise bid worth $6.5 billion.
National's main strength is in analogue semiconductors - specifically chips associated with power management. As computing and the Internet go increasingly mobile, minimising the amount of power used will become ever more important. Once the deal goes through, almost half of TI's revenue will come from analogue semiconductors.
The two head-honchos focused on the ability for TI to boost National's sales of $1.6 billion, and for the combined operation to dominate the $42 billion analogue semiconductor market.
"National has an excellent development team, and its products combined with our own can offer customers an analog portfolio of unmatched depth and breadth," said Rich Templeton, TI's chairman, president and CEO.
"Our ability to accelerate National's growth with our much larger sales force is the foundation of our belief that we can produce strong returns on our investment. The combined sales team will be 10 times larger than National's is today, and the portfolio will be exposed to more customers in more markets."
"Our two companies complement each other very well," said 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."
TI's bid of $25 per share was a big premium on National's closing price of $14.07 yesterday, and the latter's shares jumped by over 70 percent in after-hours trading. TI's were down 1.5 percent.
