Texas Instruments to acquire National Semiconductor for $6.5billion
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Texas Instruments has announced it plans to buy National Semiconductor for $6.5billion, a deal that will raise TI's profile in the growing market for analogue circuits.
TI says that the acquisition of National - one of the pioneering chipmakers of Silicon Valley - will extend, rather than duplicate its products, and will enable them to be sold to a broader range of customers.
While there are no plans to cut National's research, engineering or manufacturing operations, TI warned that the combined companies may be able to save about $100million by eliminating overlapping administrative functions.
"This acquisition is about strength and growth," said Rich Templeton, pictured, TI's chairman, president and chief executive officer. "National has an excellent development team, and its products combined with our own can offer customers an analogue portfolio of unmatched depth and breadth. In recent years, National's management team has done an outstanding job of improving margins and streamlining expenses, which upon close will increase TI's profitability and earnings per share, excluding transaction costs. 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."
National has almost 6000 employees around the world, including a manufacturing plant Scotland. 1200 employees are based at corporate headquarters in Santa Clara, and Gregg Lowe, TI's senior vice president said that the 'vast majority' of these employees 'fit into the categories of groups we intend to keep'.
Lowe will oversee National's integration into TI's business as one of four analogue product divisions, and the division will continue to incorporate the National name until the sale closes later this year. He declined to discuss what his role will be after that.
According to market analyst IHS iSuppli, the deal will increase TI's share of the analogue chip market from 14 to 17%, and position it as the third largest semiconductor company by overall revenue, behind Intel and Samsung.
