Atmel Corporation, an American-based designer and manufacturer of semiconductors, will be bought by European rival Dialog Semiconductor PLC for $4.6 billion. According to Dialog's CEO Jalal Bagherli, the acquisition, which is a cash-and-stock deal, will help the company reduce its dependence on a few smartphone makers.
San Jose, California-based company, Atmel Corp., is best known for their chips called microcontrollers, which provide computing power for many kinds of consumer and business hardware. That's why, acquiring Atmel's customer base and line of products will make Dialog a major player in chips for connected cars, wearable devices and other networked gadgets clustered under the comprehensive industrial gear called "Internet of Things", or "IoT," Market Watch revealed.
The Atmel Corp. sale process was led by investment banker Qatalyst Partners, which apparently attracted multiple bidders and where Dialog won the second bidding. In the acquisition deal, TV Newsroom reported that Atmel stockholders will receive $4.65 in cash and 0.112 of a Dialog ADS, resulting in the "economic equivalent" of $10.42 per Atmel share.
Meanwhile, in 2008, two Arizona semiconductor companies, ON Semiconductor Corp. and Microchip Technology Inc., withdrew a $2.3 billion unsolicited offer for Atmel after the company's board unanimously rejected the offer as too low.
In the transaction, which is expected to close during the first quarter, 1984-founded Atmel Corp. will get about 70 percent of its revenue from microcontrollers. Following the deal, Atmel shareholders will own about 38 percent of the combined group, Reuters noted.
Furthermore, Dialog said it planned to pay for the Atmel Corp. acquisition through cash, $2.1-billion of debt and about 49 million Dialog American Depository Shares.
Atmel actually has more employees than its acquirer. Atmel has 5,000 workers compared to about 1,500 of Dialog. But Bagherli attributed the number of employees to Atmel operating factories to manufacture some of its chips.
The Atmel Corp. $4.6 billion deal, which will boost Dialog's earnings in 2017 and result in annual cost savings of $150 million within two years, came amid the extended retirement of the company's CEO Steven Laub, who had led the company since 2006.
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