Texas Instruments Inc has trumped Westell Technologies Inc’s attempted takeover of high speed data over phone line and rival Amati Communications Corp, by offering $395m in cash. Westell offered around $294m in shares at the beginning of October (CI No 3,260) for the San Jose, California-based company. Texas Instruments is interested in Amati, which develops chipsets and software for DSL Digital Subscriber Line technology, because it is looking for new uses for its digital signal processing chips, particularly the TI TMS320C6x family. Amati has already agreed to port its DSL technology onto TI’s chips, but by buying the company TI can speed up the process and control its future directions. Westell’s original all share deal ended up worth only $320m following a 19% drop in the value of its shares. Amati has paid half the difference in the value of the deals, with a $14.8m break up fee to Westell, and Amati’s board has thrown its weight behind the new deal, implying that the cash offer and strategic fit with TI is more attractive than Westell. Amati will become a subsidiary of TI, and will report to TI’s Semiconductor Group. The deal is driven by what a Texas Instruments spokesman describes as Amati’s existing licenses to Alcatel SA, Motorola Inc, Analog Devices Inc, and others, and the great intellectual property that they hold for DSL. The deal is important for the rapidly evolving DSL market, as Amati’s technology is involved in a number of field trials and limited commercial roll outs with carriers. Amati has begun trials with Siemens AG, and has cross licensed chip patents with Alcatel SA’s Semiconductor Group, Alcatel Mitel. The company has licensed its chipsets to Motorola Inc, chip manufacturer Analog Devices Inc, and modem manufacturer PairGain Technologies Inc, and has seen its Discrete Multi Tone physical transmission protocol gain greater market support than the rival Carrierless Amplitude Phase Modulation system originally proposed as a standard by Westell and others DSL developers (CI No 3,163). As some form of sweetener for Aurora, Illinois-based Westell, TI has signed an agreement so that Westell can continue to license Amati’s existing Allegro products, and complete the deals it has already signed for the technology. TI plans to ship DSL-enabled digital signal processors in mid 1998. á