Semiconductor Company TI to Acquire National Semiconductor

Texas Instruments Incorporated (TI), a developer of analog, digital signal processing, RF and DLP semiconductor technologies, announced today that it will acquire National Semiconductor (NSM) for $25 per share in an all-cash transaction of about $6.5 billion.  

The boards of directors at both companies unanimously endorsed the transaction – a deal which will effectively combine two analog semiconductor industry leaders.

"Our two companies complement each other very well," said Don Macleod, National's chief executive officer, in a statement.  "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."

The new arrangement will bring each company’s greatest strengths to the table including the fact that TI has 30,000 analog products, extensive customer reach and industry-leading manufacturing including the world's first 300-millimeter analog factory. Similarly, National boasts a portfolio of 12,000 analog products, a strong position with customers in the industrial power market and excellent customer design tools, according to company officials.  

When the transaction is complete, National will become part of TI's analog segment, and sales of analog semiconductors will represent almost 50 percent of TI's revenue.

As part 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 transaction is expected to close in six to nine months.

"This acquisition is about strength and growth," said Rich Templeton, TI's chairman, president and chief executive officer, in a statement. "National has an excellent development team, and its products combined with our own can offer customers an analog 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,” he added. “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."  

The combined company also will benefit from National's manufacturing operations, located in Maine, Scotland and Malaysia, which TI will continue to operate. National's headquarters will remain in Santa Clara, Calif.

Last week, TI announced that recovery at its manufacturing sites in Miho and Aizu is progressing well following the 9.0 earthquake in Japan. Progress has been made at the site in Miho, about 40 miles northeast of Tokyo, as the infrastructure systems that deliver water, gases, chemicals and air, and recertified the clean room have been repaired. Moreover, more than 90 percent of the equipment has been electrically checked out.