TI agrees to acquire National Semiconductor

April 05, 2011 // By Paul Buckley
Texas Instruments Incorporated has signed a definitive agreement with National Semiconductor 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 and 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.”    

TI already offers 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