Texas Instruments (TI) will acquire National Semiconductor for $6.5 billion ($25 per share). The boards of directors of both companies have unanimously approved the all-cash transaction. National Semiconductor is a leader in power management technology. The company is headquartered in Santa Clara, California and reported sales of $1.42 billion for fiscal 2010.
National Semiconductor currently has a portfolio of 12,000 analog products. After the merger, National will become a part of TI’s analog business. Sales of analog semiconductors will represent almost 50% of TI’s revenue. TI will continue to operate National’s manufacturing operations in Maine, Scotland and Malaysia. Each site has additional capacity to increase production. National’s headquarters will remain in Santa Clara, California.
Texas Instruments will fund the acquisition 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, with 30,000 analog products, is the market leader with 2010 analog revenue of $6.0 billion (14% of the market). National Semiconductor’s revenue in calendar year 2010 was about $1.6 billion (3% of the market).