A bit of history will be sold.
Fairchild's management and Sterling LLC, a Citicorp Venture Capital investment firm, will raise $550 million. The proceeds will go to National Semiconductor, which will retain a minority stake in the company of less than 20 percent, according to Bill Callahan, a National spokesman.
The deal will close by May 25, and National expects to report a gain in its fiscal fourth quarter that has yet to be determined.
The sale comes as National's new chief executive, Brian Halla, is looking to focus on the higher-end mixed signal and analog chips. These chips are used in Internet access appliances, which is one of the key markets for National, Callahan said.
Fairchild, meanwhile, concentrates on mass producing standard chips, while National is looking to specialize in custom, high-integration chips. "This sale enables each company to concentrate on its core competencies to maximize [its] businesses," Halla said in a statement.
National had combined sales of $1.23 billion for six-month period, ended November 24, of which Fairchild contributed $286.7 million.
And National's gross margins during this period reached 34.4 percent for the combined companies, while Fairchild had gross margins of 22.8 percent.
Fairchild will be headquartered in South Portland, Maine.