Texas Instruments (TI) has acquired National Semiconductor to further strengthen its position in the semiconductor industry and improve growth.
The companies have signed a definitive agreement under which TI will acquire National for $25 per share in an all-cash transaction of about $6.5bn.
The boards of directors of both companies have unanimously approved the transaction.
TI’s chairman, president and chief executive officer Rich Templeton said, "This acquisition is about strength and growth."
"National has an excellent development team, and its products combined with our own can offer customers a portfolio of unmatched depth and breadth," he added.
Post acquisition, the companies will have combined revenue of $14.5bn (£8.9bn). The move is expected to take TI to the third spot in the rankings of the world’s largest semiconductor supplier overtaking Toshiba. Intel and Samsung are the other top players.
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Templeton hopes to harness the company’s sales force to improve the growth of National.
He said, "Our ability to accelerate National’s growth with our much larger sales force is the foundation of our belief that we can produce strong returns on our investment."
"The combined sales team will be 10 times larger than National’s is today, and the portfolio will be exposed to more customers in more markets."
National’s chief executive officer Don Macleod said, "Our two companies complement each other very well."
"TI has much greater scale in the marketplace, with its larger portfolio of products and its large global sales force. This provides a platform to enhance National’s strong and highly profitable analog capability, power management in particular, leading to meaningful growth."
The acquisition is subject to customary closing conditions, including review by US and international regulators and approval by National’s shareholders.
The transaction is expected to close in six to nine months.
