Texas Instruments buys National Semiconductor
My National pals just called– TI paid 6.5 billion to buy up National Semi. Here is a web page:
National stock has jumped from 14.02 to $25 in after-hours trading. TI stock fell 1.3%
I will paste the press release below.
- DALLAS, TEXAS and SANTA CLARA, CALIF. (April 4, 2011) - Texas Instruments Incorporated (TI) (NYSE: TXN) and National Semiconductor (NYSE: NSM) today announced they have signed a definitive agreement under which TI will acquire National for $25 per share in an all-cash transaction of about $6.5 billion. The acquisition combines two industry leaders in analog semiconductors, each with unique strengths in delivering products to improve performance and efficiency and convert real-world signals in electronic systems. The boards of directors of both companies have unanimously approved the transaction.
- “This acquisition is about strength and growth,” said Rich Templeton, TI’s chairman, president and chief executive officer. “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. 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.”
- “Our two companies complement each other very well,” said Don Macleod, National’s chief executive officer. “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.”
- Each company has unique strengths. Among them are the breadth of TI’s 30,000 analog products, extensive customer reach, and industry-leading manufacturing including the world’s first 300-millimeter analog factory. National brings a portfolio of 12,000 analog products, a strong position with customers in the industrial power market, and excellent customer design tools. Upon close of the transaction, National becomes part of TI’s analog segment, and sales of analog semiconductors will represent almost 50 percent of TI’s revenue.
- The combined company also will benefit from National’s manufacturing operations, located in Maine, Scotland and Malaysia, which TI will continue to operate. Each site has additional capacity to increase production. National’s headquarters will remain in Santa Clara, California.
- Under terms 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 acquisition is subject to customary closing conditions, including review by U.S. and international regulators and approval by National’s shareholders. The transaction is expected to close in six to nine months.
- The market for analog semiconductors was $42 billion in 2010. TI is the market leader with 2010 analog revenue of $6.0 billion, or 14 percent of the market. National’s revenue in calendar year 2010 was about $1.6 billion, or 3 percent of the market.
Grim Reaper commented:
Brian Halla will go down in history as having lost National billions while pursuing several dead ends. Don McLeod will go down in history as having finally destroyed National Semiconductor. Yet both will have lucrative retirements.
jcdrisc commented:
I believe Mr Templeton made a blatant lie in his opening statement that there will be NO DELETION of National parts.
Industry veterans are ALSO skeptical.
Waddya say, MR TEMPLETON ???
Pesky Varmint commented:
If you thought Halla screwed National up, just wait.
ARUN, GOA, INDIA commented:
ALL THE ANALOG INITIATIVES TAKEN BY NATIONAL FOR SO MANY YEARS HAVE JUST BEEN ENDED ABRUPTLY. THE INDUSTRU WILL SUFFER
AGB commented:
Oh I am so happy. So National parts will get the same wonderful support from TI that we got for those old Unitrode and Burr-Brown parts.
Bill in Silicon Valley commented:
National has been up for sale since at least March of 2010. TI was smart to wait until the world & US economy showed real recovery trend before buying. Many NSC parts were under advertised because of NSC's push on the "PowerWise" program. NSC also missed some business in an effort to get gross margins higher - to try to fit the Linear Tech model, and get a stock valuation like LLTC.
Now TI has an effectively new 300 mm fab line in Arlington, Texas, which will have low costs because of the wafer size (12 inches / 300 mm). TI would like to fill that fab, and a few high volume National parts will help. (Most NSC parts will continue to run at the NSC fabs). To get the people to help bring up the parts and process, TI can look for the employees that National laid off about a year ago when National closed their fab in...wait for it...Arlington, Texas. Some of these people already work for TI.
So TI gets a good deal on National, and can quickly (few years) leverage to higher sales and lower wafer costs at the same time, with less hassle and lower risk because of the trained workforce on their doorstep. The combination will have a strong position in a number of areas: Mil/Areo/Hi-rel/RAD-hard (small volume, great profits), power products (a really broad range of power products), amplifiers, power detectors for cell phones, and Ser-Des.
So what can we concluded from this? Three possible answers (they are not exclusive)
1. The Texas Instruments management is very smart.
2. The Texas Instruments management is very lucky.
3. God likes Texas Instruments.
Len S commented:
When I saw this, I looked three times to be sure it wasn't an April Fools gag that I missed a few days ago. Obviously not good for the Analog world, and sort of sad that the National lineage gets absorbed by those Texas horse traders. It would have been a lot more fun if LTC had bought them.
Andy T commented:
Now I can't help but wonder if the layoffs in March 2009 were part of an imminent deal with TI that got shelved until now. Did Halla's unexplained departure have anything to do with not closing the deal before the stock market tanked? With the jettison of the Austin fab and 29% of the company's talent for no apparent reason (sales were UP the following quarter), I'm compelled to don my tinfoil hat on that one. Anyway, lets hope the TI beancounters don't do more NSC layoffs.
Mr. Looks A. Head commented:
I wonder how much gas and groceries $25 will buy in 6 to 9 months?
Duck commented:
Paul. Have you gone to the National Website. When you do the webpage FORCES you "ACCEPT" the "Terms and Conditions" of the National merger by TI in order to view the Website!! If you click on "Decline" you can NOT view the National Website! It is the very kind of corporate arrogance and legal posturing that will do nothing more than suffocate the innovation that National was known for. This merger isn't about expanding the breadth of TI's analog offering. It's about snuffing out a worthy competitor. I'll bet TI have already put plans in in place to obsolete over half of the National product portfolio. It looks like Pease got out just in time.
