Microchip Technology, a semiconductor maker based in Arizona, has struck a deal to buy Microsemi Corp, which makes chips for communications and for aerospace and defense applications, for about US$8.3 billion.
Microchip will pay US$68.78 a share in cash for Microsemi, which is based in California, according to an announcement Thursday.
Including debt, the deal has a value of just over US$10 billion, the Wall Street Journal reports.
The deal represents “an opportunity to cross-sell our chips into end markets where they’re strong and vice versa,” the Journal quoted Microchip Chairman and CEO Steve Sanghi as saying in an interview.
The acquisition is about “bringing together two of the strongest business franchises in our industry that are highly complementary and will deliver significant value for shareholders and customers,” Sanghi said.
According to the report, Sanghi will remain chairman and chief executive of the combined entity.
The deal comes amid a wave of consolidation in the semiconductor industry as companies seek to cut costs amid fierce competition and position themselves for new applications, the Journal noted.
Microchip has a market value of more than US$20 billion after a spree of some 19 acquisitions in the past decade.
The company’s so-called Microchip 2.0 strategy calls for it to sell customers a wider range of products, which the Microsemi takeover is expected to further, the Journal said.
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