ON Semiconductor, Microchip Technology drop bid for Atmel

By Lisa Kerner

Charlotte, N.C., Nov. 18 - ON Semiconductor Corp. said it is withdrawing from its joint proposal with Microchip Technology Inc. to acquire Atmel Corp. due to "unforeseen deterioration in the semiconductor market" since the proposal was first announced as well as "unprecedented weakness in the financial markets."

Microchip said that as a result, it now must also withdraw its $5-per-share offer for Atmel.

Steve Sanghi, president, chief executive officer and chairman of Microchip, said the company will evaluate its potential alternatives for pursuing a transaction independently of ON Semiconductor, according to a Microchip news release.

"The decision by Microchip and ON Semiconductor to withdraw their unsolicited, unfinanced proposal underscores our board's determination that the proposal was highly conditional and subject to significant execution risk," Atmel said in a statement released on Tuesday.

It was previously reported that Microchip and ON Semiconductor were prepared to take their $2.3 billion offer directly to Atmel's shareholders after it was rejected by Atmel's board.

In addition, Microchip intends to nominate a slate of directors at Atmel's next annual meeting of shareholders, Atmel said.

Microchip is a Chandler, Ariz.-based semiconductor producer.

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

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

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