Microchip, ON propose $2.3 billion deal for Atmel
Plan calls for Microchip to lead the acquisition and then sell Atmel's nonvolatile-memory and RF and automotive businesses to ON to partly finance the deal.
Microchip Technology and On Semiconductor have made a $2.3 billion bid for semiconductor maker Atmel Corp., the companies announced Thursday.
Atmel designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory, and radio frequency (RF) components.
The two companies sent a letter to Atmel CEO Steven Laub proposing a $5 per share buyout, which represents a 52 percent premium over Atmel's closing share price on October 1, 2008.
The letter follows earlier discussions between Atmel and Microchip.
"We appreciate your having taken the time to meet with (Microchip CEO) Steve Sanghi on September 5th to discuss Microchip's potential acquisition of Atmel," the letter says. "However, we were deeply disappointed to learn subsequently that the Atmel Board of Directors appears unwilling to consider a transaction at this time under any circumstances."
The plan calls for Microchip to lead the acquisition and then sell Atmel's nonvolatile-memory and RF and automotive businesses to ON to partly finance the deal. ON said it would finance its purchase using a combination of existing cash resources, borrowings under its existing credit facility and additional financing.
Atmel also said that if the deal goes through, it intends to dispose of Atmel's ASIC business upon completing the acquisition or shortly thereafter, and has spoken to an interested third party about the sale.
In a statement, Atmel said its board of directors would "review and consider the proposal in due course."