Microchip Technology, ON Semiconductor make offer for Atmel

By Lisa Kerner

Charlotte, N.C., Oct. 2 - Atmel Corp. said its board of directors will review an unsolicited proposal from Microchip Technology Inc. and ON Semiconductor Corp. to acquire the company for $5 per share in cash.

The offer, which values Atmel at $2.3 billion, is subject to the sale of assets, due diligence and financing, an Atmel news release said.

According to Microchip and ON Semiconductor, the per-share offer price is a 52.4% premium to Atmel's closing price of $3.28 on Oct. 1.

In an Oct. 1 letter to Atmel, Microchip called the offer "simply too compelling not to bring to your shareholders."

Microchip, a Chandler, Ariz.-based semiconductor producer, said the acquisition will be financed in part by the sale of Atmel's nonvolatile memory, radio frequency and automotive businesses to ON Semiconductor, according to the letter.

ON Semiconductor would finance its purchase using a combination of existing cash resources, borrowings under its existing credit facility and additional financing, the letter said.

Microchip said it plans to dispose of Atmel's application-specific integrated circuit business once the acquisition of Atmel is complete.

J.P. Morgan is advising Microchip on the proposed transaction.

Atmel, based in San Jose, Calif., designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency components.

ON Semiconductor is a Phoenix-based designer, manufacturer and marketer of power and data management semiconductors and standard semiconductor components.

Mentioned in this article:

Atmel Corp. Nasdaq: ATML

Microchip Technology Inc. Nasdaq: MCHP

ON Semiconductor Corp. Nasdaq: ONNN

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