Texas Instruments(TI) is all set to buy its rival National Semiconductor for $6.5 billion in cash, which will make Texas Instruments one of the world's largest makers of analog technology components.
As per the deal, TI will be paying $25 for every share of National Semiconductor(with 78% premium to share price of $14.07) and it will be funded as a combination of cash payment and the company-issued debt. As per TI estimations, the market for analog semiconductors was a $42 billion industry in 2010, and it held around 14% of the market and National Semiconductor controls around 3%. The deal will combine their complementary product portfolios and increase National Semiconductor's sales position by giving it access to TI's larger sales force. In exchange, TI gets access to National Semiconductor's portfolio of industrial products. TI expects that the deal will be accertive to its earning in the first year itself accounting for around 50% of TI's annual revenue.
Prior to this deal, National Semiconductor was not looking to sell itself, but Texas Instruments' unsolicited offer was too generous to turn down and the deal was finalized. The deal is expected to close in six to nine months, pending regulatory and shareholder approvals wihtout any major regulatory hurdles.
As per the deal, TI will be paying $25 for every share of National Semiconductor(with 78% premium to share price of $14.07) and it will be funded as a combination of cash payment and the company-issued debt. As per TI estimations, the market for analog semiconductors was a $42 billion industry in 2010, and it held around 14% of the market and National Semiconductor controls around 3%. The deal will combine their complementary product portfolios and increase National Semiconductor's sales position by giving it access to TI's larger sales force. In exchange, TI gets access to National Semiconductor's portfolio of industrial products. TI expects that the deal will be accertive to its earning in the first year itself accounting for around 50% of TI's annual revenue.Prior to this deal, National Semiconductor was not looking to sell itself, but Texas Instruments' unsolicited offer was too generous to turn down and the deal was finalized. The deal is expected to close in six to nine months, pending regulatory and shareholder approvals wihtout any major regulatory hurdles.
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