Texas Instruments (TI) (NYSE:TXN) has announced its intention to acquire and National Semiconductor (NYSE:NSM).
TI will be paying $25 per National Semiconductor share for a total purchase price of $6.5 billion. The deal is expected to close inside of the next nine months. The deal will expand TI’s analog semiconductor product portfolio.
“TI’s strategy is to focus on analog and embedded processing, to drive growth and returns, both are large and we have strong positions in each, but our share is still modest,” Rich Templeton chairman, president and chief executive officer of TI said during a conference call announcing the deal. “Clearly we have significant opportunity to grow.”
Templeton added that the acquisition of National Semiconductor is a key step in TI’s strategy for growth. He noted that the acquisition will broaden TI’s analog portfolio of products.
“National has 12,000 products in its portfolio – TI has 30,000,” Templeton said. “In any given year TI introduces about 500 new analog products and with this acquisition we add 12,000 products all at once.
According to Templeton, there is minimal product overlap between the two companies and the products are highly complementary.
“The bottom line is that the combination of TI and National means we can engage with customers and application segments where have no or minimal engagements today,” Templeton said.
According to TI, the analog semiconductor market was worth $42 billion in 2010 with TI holding on to 14 percent of the market.