Analysis
TI to acquire National Semiconductor
Texas Instruments Incorporated and National Semiconductor today announced they have signed a definitive agreement under which TI will acquire National for $25 per share in an all-cash transaction of about $6.5 billion. The acquisition combines two industry leaders in analog semiconductors, each with unique strengths in delivering products to improve performance and efficiency and convert real-world signals in electronic systems. The boards of directors of both companies have unanimously approved the transaction.
“T“Our two companies complement each other very well,” said Don Macleod, National’s chief executive officer. “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.”
Each company has unique strengths. Among them are the breadth of TI’s 30,000 analog products, extensive customer reach, and industry-leading manufacturing including the world’s first 300-millimeter analog factory. National brings a portfolio of 12,000 analog products, a strong position with customers in the industrial power market, and excellent customer design tools. Upon close of the transaction, National becomes part of TI’s analog segment, and sales of analog semiconductors will represent almost 50 percent of TI’s revenue.
The combined company also will benefit from National’s manufacturing operations, located in Maine, Scotland and Malaysia, which TI will continue to operate. Each site has additional capacity to increase production. National’s headquarters will remain in Santa Clara, California.
Under terms of the agreement, National stockholders will receive $25 in cash for each share of National common stock they hold at the time of closing. TI expects to fund the transaction with a combination of existing cash balances and debt. The acquisition is subject to customary closing conditions, including review by U.S. and international regulators and approval by National’s shareholders. The transaction is expected to close in six to nine months.
The market for analog semiconductors was $42 billion in 2010. TI is the market leader with 2010 analog revenue of $6.0 billion, or 14 percent of the market. National’s revenue in calendar year 2010 was about $1.6 billion, or 3 percent of the market.