Dialog Semiconductor on Sunday announced a US$4.6 billion cash and stock deal to acquire Atmel, a deal that will boost the combined company’s presence in the Internet of Things (IoT) space.
The London-based company highlighted the merged outfit’s strength in the mobile power management and automotive sectors, as well as in the wider IoT space.
The new company will address a fast-growing market opportunity of around $20 billion by 2019, Dialog predicted.
Dialog CEO Jalal Bagherli said the rationale for the proposed transaction is clear.
"By bringing together our technologies, world-class talent and broad distribution channels we will create a new, powerful force in the semiconductor space," he said.
"We firmly believe that by combining power management, microcontrollers, connectivity and security technologies, we will create a strong platform for innovation and growth in the large and attractive market segments we serve," he added.
Bagherli will retain his position as chief executive officer of the enlarged Dialog, and executive director of its board. Two Atmel board directors will become Dialog directors once the deal closes.
The firms expect the transaction to close in the first quarter of 2016.
Both companies’ boards have approved the deal, but it still requires certain regulatory approvals and the go-ahead from sh areholders.
Dialog said it expects the deal to be accretive to earnings in the first full year after closing, which should be 2017. It is also eyeing annual cost savings of $150 million within two years.
