TI Buys National Semiconductor To Boost Analog Portfolio


Texas Instruments plans to snap up National Semiconductor in a $6.5 billion deal creating an analog semiconductor giant and giving Texas Instruments new manufacturing facilities and product lines.

TI on Monday said after the close of the stock market that it and National Semiconductor have signed a definitive agreement for the all-cash acquisition, which prices National Semiconductor at $25 per share, a nearly 80 percent premium over the company’s closing share price of $14.07.

TI currently has a product line which includes about 30,000 analog products, in addition to a wide arrange of production facilities including what the company termed the world’s first 300-mm analog factory.

National Semiconductor brings a portfolio of about 12,000 analog products, a large customer base including a strong position in the industrial power market, and new design tools, TI said. It also brings TI new manufacturing operations in Main, Scotland, and Malaysia, all of which TI will continue to operate, the company said.

TI estimated the 2010 worldwide market for analog semiconductors to be about $42 billion. TI is the leading vendor with analog revenue of $6 billion, while National Semiconductor had revenue of about $1.6 billion. Combined, the two companies accounted for 17 percent of the entire market in 2010.

The acquisition, which is subject to review by U.S. and international regulators is expected to close in six to nine months. At that time, National Semiconductor will become part of TI's analog segment.

The 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,” Templeton said in the statement. “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."