Confirming reports that have been circulating for a month (CI No 751), National Semiconductor Corp announced yesterday that it has definitive agreement with Schlumberger Ltd to acquire its Fairchild Semiconductor unit for about $122m in shares and warrants which, if fully converted, would give Schlumberger about 8% of NatSemi. The deal does not include certain unused Fairchild facilities, including ones in West Germany and Japan, and related indebtedness. Schlumberger will report Fairchild as a discontinued operation, and the French company says it expects to post a third quarter loss of approximately $220m in connection with the deal. Schlumberger reported a loss of $25.6m in its third quarter to March 8, including a $15m charge tied to restructuring. NatSemi’s president and chief executive, Charles Sporck, was exuberant about the purchase, say-ing, In acquiring Fairchild, National becomes America’s best technologically balanced semiconductor supplier with leading-edge capabilities in CMOS and bipolar products across a broad line of proprietary offerings. NatSemi does about $1,000m a year in chips, Fairchild about $500m. Sporck noted that Fairchild’s strength lies mainly in the mainframe mar-ket, while National Semiconductor excels in the computer peripherals business. Among the more recent offers for Fairchild was a management buyout, backed by CitiCorp, that would have left the unit as a freestanding company. Intergraph Corp, Huntsville, Alabama, had reportedly wan-ted to play a part in the management’s bid, but sources indicated that opposition from within the company may have put a stop to that. Intergraph wanted to ensure the future of the Fairchild Clipper 32-bit chip set used in its top-end workstations, but the company is now reportedly evaluating the new Sun Microsystems SPARC RISC chip as an alternative.
