Texas Instruments to amass National Semiconductors for $6.5 billion in cash money

TI to procure National Semiconductor
Complementary portfolios are foundation for growth

DALLAS and SANTA CLARA, Calif., April 4, 2011 /PRNewswire/ — Texas Instruments Incorporated (TI) (NYSE: TXN) and National Semiconductor (NYSE: NSM) today announced they’ve got signed a definitive agreement under which TI will acquire National for $25 per share in an all-cash transaction of about $6.5 billion. The purchase combines two industry leaders in analog semiconductors, each with unique strengths in delivering products to enhance performance and efficiency and convert real-world signals in electronic systems. The boards of directors of both companies have unanimously approved the transaction.

“This acquisition is ready strength and growth,” said Rich Templeton, TI’s chairman, president and chief executive officer. “National has a superb development team, and its products combined with our own can offer customers an analog portfolio of unmatched depth and breadth. In recent times, National’s management team has done a superb job of improving margins and streamlining expenses, which upon close increases TI’s profitability and earnings per share, excluding transaction costs. Our ability to accelerate National’s growth with our much larger sales force is the root of our belief that we will produce strong returns on our investment. The combined sales team may be 10 times larger than National’s is today, and the portfolio will probably be exposed to more customers in additional markets.”

“Our two companies complement one another rather well,” said Don Macleod, National’s chief executive officer. “TI has much greater scale available to buy, with its larger portfolio of goods and its large global sales force. This offers a platform to improve National’s strong and highly profitable analog capability, power management specifically, resulting in meaningful growth.”

Each company has unique strengths. Among them are the breadth of TI’s 30,000 analog products, extensive customer reach, and industry-leading manufacturing including the area’s first 300-millimeter analog factory. National brings a portfolio of 12,000 analog products, a powerful position with customers within the industrial power market, and perfect customer design tools. Upon close of the transaction, National becomes portion of TI’s analog segment, and sales of analog semiconductors will represent almost 50 percent of TI’s revenue.

The combined company will also take advantage of National’s manufacturing operations, located in Maine, Scotland and Malaysia, which TI will continue to function. Each site has additional capacity to extend production. National’s headquarters will remain in Santa Clara, California.

Under terms of the agreement, National stockholders will receive $25 in cash for every share of National common stock they hold on the time of closing. TI expects to fund the transaction with a mix of existing cash balances and debt. The purchase is subject to customary closing conditions, including review by U.S. and international regulators and approval by National’s shareholders. The transaction is anticipated to shut in six to nine months.

The marketplace for analog semiconductors was $42 billion in 2010. TI is the market leader with 2010 analog revenue of $6.0 billion, or 14 percent of the market. National’s revenue in calendar year 2010 was about $1.6 billion, or 3 percent of the market.