Dialog Semiconductor has been looking for an acquisition for some time. Having failed last year to reach agreement to buy sensor and analogue specialist ams, it said it remained committed to exploring opportunities to enhance its product portfolio and to expand its addressable market through strategic transactions.
It seems to have satisfied that commitment with a deal to buy Atmel for $4.6billion that, in CEO Jalil Bagherli's words, will 'create a global leader in power management and embedded processing solutions'.
The deal is the latest in a rash of deals being struck in the semiconductor world. Intel is currently completing its $16.7bn acquisition of Altera, Avago is in the midst of spending $37bn on Broadcom and Microchip is spending $839million to bring Micrel into its stable.
Three themes appear in most of these recent transactions: a move to create a so called 'portfolio sell'; the inevitable search for 'synergies'; and 'value for shareholders'.
Assuming the deal completes, the combined company will have a reasonable portfolio; power, computing, touch and security are technologies applicable to a range of market sectors. Dialog expects to save $150m a year in operating costs, while Atmel stockholders will see a return on their investment.
Will the deal make sense? Dialog obviously thinks so and expects to pay of the $2bn it has borrowed within three years.
