Dialog Semiconductor to buy Atmel for $4.6bn

21st September 2015

Mick Elliott

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Dialog Semiconductor is buying Atmel for $4.6bn. The UK-based company says the deal creates a global leader in both Power Management and Embedded Processing solutions able to pursue opportunities in the Mobile Power, IoT and Automotive customers. The combined company will address an attractive, fast growing market opportunity of approximately $20 billion by 2019.

Dialog will combine its Power Management ICs portfolio with Atmel’s proprietary and ARM-based Microcontrollers in addition to high performance ICs for Connectivity, Touch and Security. Dialog will also leverage Atmel’s established sales channels to significantly diversify its customer base. Through realised synergies, Dialog expects the combination will deliver an improved operating model and enable new revenue growth opportunities.

“The rationale for the transaction we are proposing today is clear – and the potential this combination holds is exciting. By bringing together our technologies, world-class talent and broad distribution channels we will create a new, powerful force in the semiconductor space. Our new, enlarged company will be a diversified, high-growth market leader in Mobile Power, IoT and Automotive. We firmly believe that by combining Power Management, Microcontrollers, Connectivity and Security technologies, we will create a strong platform for innovation and growth in the large and attractive market segments we serve. This is an important and proud milestone in the evolution of our Dialog story,” said Jalal Bagherli, Dialog Chief Executive Officer.

“This transaction combines two successful companies and will create significant value for Atmel and Dialog shareholders, customers and employees. Adding Dialog’s world-class capabilities in Power Management with Atmel’s keen focus on Microcontrollers, Connectivity and Security will enable Dialog to more effectively target high-growth applications within the Mobile, IoT and Automotive markets,” said Steven Laub, Atmel President and Chief Executive Officer.

Dialog anticipates achieving projected annual cost savings of $150 million within two years.

Atmel has made a number of acquisitions in recent years to strengthen its position in the IoT market. In 2013 it acquired IDT’s smart metering product line and in July 2014 it bought Newport Media strengthening its capability in Bluetooth and WiFi.

On the distribution front both companies are signed with Arrow Electronics and Digi-Key in the major European markets.

Atmel has the more extensive network in Europe also encompassing EBV Elektronik, Mouser Electronics, Future Electronics and Farnell element14 as well as selected local distributors.

Dialog Semiconductor also has an agreement in key European markets with Ismosys.