Dialog Semiconductor to buy U.S. peer Atmel for $4.6 billion

Sun Sep 20, 2015 1:58pm EDT
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By Christoph Steitz and Liana B. Baker

FRANKFURT/NEW YORK (Reuters) - Chipmaker Dialog Semiconductor (DLGS.DE: Quote) said it had agreed on Sunday to buy U.S. peer Atmel ATML.O for about $4.6 billion, as the Anglo-German company seeks to expand its industrial product portfolio.

Dialog, which is heavily exposed to Apple (AAPL.O: Quote) and Samsung (005930.KS: Quote), said the deal would diversify its client base in automotive markets as well as network-connected chips used in industrial gear, also known as the "Internet of Things".

Based in San Jose, California, Atmel manufactures small processors called microcontrollers that are used in a variety of electronics and other hardware in this connected device area.

Dialog had been looking to expand its industrial offerings since its talks broke off last year to merge with Austria's AMS AG (AMS.S: Quote), which made sensors.

"The rationale for our acquisition is to build a complementary business to power savings and power management and it gives us a better platform for the 'Internet of Things'," Jalal Bagherli, Dialog's Chief Executive, said in an interview.

Besides microcontrollers, Atmel also has touch-screen and encryption technology that attracted Dialog, he said. There is only a 5 percent overlap in the two companies' product lines, Bagherli added.

Some $80 billion in semiconductor M&A has been racked up so far this year, the biggest year for chip deals since 2000, according to Thomson Reuters data.

Major deals in the sector have included Avago Technologies Ltd's (AVGO.O: Quote) $37 billion acquisition of Broadcom Corp BRCM.O in May as well NXP's (NXPI.O: Quote) announcement in March to buy U.S. peer Freescale Semiconductor FSL.N for $17 billion.   Continued...