Atmel buyout called off

An increase in acquisitions is inevitable as the credit crunch tightens its grip on the electronics industry. Smaller companies are being snapped up by larger corporations as the sector seeks viable short term and long term solutions. However, On Semiconductor and Microchip’s failed bid to acquire Atmel Corp has dramatically bucked this trend. The acquisition would have been the latest in a long line of takeovers by On, including companies such as Catalyst Semiconductor and AMIS. Following the rejected offer, Keith Jackson, president and chief officer of On, was positive that the deal would still happen. “We are confident that if Atmel were to enter into discussions and permit us to conduct customary due diligence,” he said, “we would be able to address concerns Atmel has expressed with the perceived conditionality and complexity of our offer.” Nevertheless, despite plans to take the offer directly to Atmel’s shareholders, within days the joint bid was abandoned. Jackson blamed the withdrawal on ‘the unforeseen deterioration in the semiconductor market.’ Speaking at Electronica, On’s vice president, digital and mil/aero BU, Vince Hopkin, told New Electronics that the company’s focus on acquisitions had broadened its applications potential. “Our recent acquisitions have enhanced our portfolio, strengthening our world class, high volume and cost effective products. We are currently planning four more acquisitions in the coming year.” By diversifying, Hopkin explained, the company would attain the flexibility and range to withstand the economic slowdown. Indeed, the strategy was in place long before any mention of the credit crunch. “Our sales and engineering resources have greatly increased with the experience of companies such as CPU Voltage, AMI and Catalyst. Our primary market used to be automotive, but now we have leverage in sectors such as computing/gaming, portable consumer, media, entertainment, industrial, medical and military.” While this approach of unremitting acquisition seems to be a success, Atmel’s refusal to accept On and Microchip’s offer, reveals the confidence the industry has in its own resilience.