LSI Logic Inc has now agreed to buy Symbios Inc, the US semiconductor and storage system subsidiary of Hyundai Electronics America, following the collapse of the deal which would have seen it acquired by Adaptec Inc (CI No 3,440) for $775m in cash. The Adaptec deal fell through when it became apparent that the Federal Trade Commission was planning to block the transaction. LSI will pay $760m in cash, a price that includes an unspecified amount of assumed liabilities. The deal gives LSI an expanded product range, with instant strength in SCSI chips and tape and disk storage drives. The SCSI business was the main concern of the FTC in its study of the proposed Adaptec deal, as the combination of the two would have given the merged company a near monopolistic market share. LSI doesn’t anticipate any such trouble from federal regulators, as it said it has very little product overlap to worry about. A spokesperson for Adaptec said the deal came as a bit of a surprise, considering it had only pulled out of its proposed offer on Thursday. Although the acquisition was basically hammered out in one weekend, a spokesperson for LSI said the process began back in January when it first made overtures to Symbios, having met with its management and performed due diligence before seemingly losing out to Adaptec. Since most of the legwork had been done months ago, LSI capitalized on the previous relationship and swept in. The two boards voted on the deal over the weekend and the papers were signed Sunday evening at 7:30 Pacific time. The deal is expected to close during the third quarter and LSI figures the acquisition will be accretive to earnings in 1999. LSI will take a charge during the third quarter in connection with the purchase, but the amount has yet to be determined. It’s also too early to talk about job cuts in duplicated functions, according to the company. Symbios has been around the block a few times. It was originally started in 1972 as a division of NCR Corp before becoming the microelectronics unit at AT&T Corp, a period that ended in 1995 when Hyundai assumed control of it.
