Texas Instruments to Buy National Semi for $6.5B

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Texas Instruments Inc. (TXN) said Monday after the market closed that it will acquire National Semiconductor (NSM) for $25 a share, or approximately $6.5 billion, in an all-cash offer.

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The offer represents a 78% premium to National Semi’s closing price on Monday of $14.07.

The two chip makers, both of which specialize in analog semiconductors, will benefit from an increased sales team that TI called “10 times larger” than National’s current team, and will offer an expanded analog portfolio of “unmatched depth and breadth,” Rich Templeton, TI’s chairman and chief executive officer, said in a joint statement from the companies.

The statement boasted of National Semi’s dominance in the industrial power market, and noted that when the deal closes, analog semiconductor sales will represent nearly 50% of TI’s revenue. TI said it will also benefit from National’s manufacturing locations in Maine, Scotland and Malaysia, which will remain in operation.

"Our two companies complement each other very well," said Don Macleod, National Semi's chief executive officer, in a statement. "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."

Both companies’ boards have approved the deal and they expect the transaction to close in the next six to nine months.

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Shares of Texas Instruments fell a fraction of 1% in Monday’s session, closing at $34.11 before falling 2.3% in after-hours trading. National Semiconductor’s shares fell 16 cents on Monday to close the day at $14.07, before rallying more than 70% on news of the acquisition, after the bell.

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