TI to buy Nat Semi

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 From The Register:

Texas Instruments has agreed to purchase rival National Semiconductor
for $6.5 billion, a deal would combine two of the world's largest chip

TI said the pact would expand its portfolio of analog chips, processors
that create a bridge between the worlds of analog and digital. Whereas
digital chips can only handle 1s and 0s, analog chips can read and
process varying signals, such as speech and music and old school video.

Such chips are used in everything from cameras and phones to industrial
equipment. According to TI, a combined company would offer 42,000
analog-chip products, and sales of those products would provide about
half of TI's overall revenue.

"This acquisition is about strength and growth," reads a canned
statement from TI chairman, president, and chief executive officer Rich
Templeton. "National has an excellent development team, and its products
combined with our own can offer customers an analog portfolio of
unmatched depth and breadth."

According to Templeton, by acquiring National Semiconductor, TI would
significantly accelerate its rival's growth, thanks to a combined sales
force that's 10 times the size of what Nat Semi has today. "In recent
years, National's management team has done an outstanding job of
improving margins and streamlining expenses, which upon close will
increase TI's profitability and earnings per share, excluding
transaction costs," he said.

"Our ability to accelerate National's growth with our much larger sales
force is the foundation of our belief that we can produce strong returns
on our investment."

TI also said that it would benefit from the existing Nat Semi
manufacturing operations located in Maine, Scotland, and Malaysia,
adding that each site had room for increased production. Following the
acquisition, National Semiconductor's headquarters will remain in Santa
Clara, California, about an hour's drive from San Francisco. The deal is
expected to close in six to nine months.

According to TI, the analog semiconductor business is a $42bn market,
with TI controlled about 14 per cent, or $6bn. Nat Semi, it said,
controls about three per cent, or $1.6bn.

TI has agreed to pay stockholders $25 per share of Nat Semi common stock
they hold at the time the deal closes. It intends to fund the deal
through cash balances and debt.

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