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Cypress succumbs to series of unfortunate bids

Posted: 30 Sep 2015     Print Version  Bookmark and Share

Keywords:acquisition  fabless  RF  Internet of Things  IoT 

Cypress Semiconductor has finally given up its pursuit of Atmel after several attempts to buy the fabless vendor of microcontroller ICs. Cypress said in a statement that an offer to acquire the latter has already expired, reversing the claim of an earlier Reuters report.

Dialog Semiconductor recently won the second round of bidding to acquire Atmel in a $4.6-billion cash-and-stock deal announced Sept. 20 (see Dialog agrees to buy Atmel for $4.6B). The acquisition is part of a move to capture a larger slice of the Internet of Things (IoT) market.

Dialog is a fabless chip company that sells chips for mixed-signal, RF, power control functions in smartphones and mobile consumer equipment. Atmel focuses on microcontrollers that provide computing power for consumer and industrial applications.

A Reuters report, which quoted unnamed sources, said Monday that Cypress was preparing a new offer in an attempt to outbid Dialog for Atmel. The activity is indicative of a wave of consolidation that the semiconductor sector is experiencing.

The report further stated that Cypress is working with investment bankers and has informed Atmel it believes its offer will be superior to Dialog's cash-and-stock deal. At $2.7 billion, Cypress's market capitalisation is similar to that of Dialog's at $2.73 billion, both considerably smaller than that of the takeover target, which stands at $3.46 billion.

Had Cypress succeeded in the acquisition of Atmel, it would have to pay a fee to Dialog of $137.3 million because of a termination clause written into the agreement reached between Atmel and Dialog, the report said.

Earlier in July, Cypress lost to Uphill Investment Co., a consortium of Chinese investors, in an intense tug-of-war to acquire Integrated Silicon Solution Inc. (ISSI). Uphill ultimately paid $23 per share in cash after initially offering $19.25 per share in March. The final deal values ISSI at $730.5 million.

Founded in 1988, ISSI designs and develops high-speed and low-power SRAM and low- and medium-density DRAM and NOR flash products for the automotive, communications, digital consumer, industrial and medical markets. Customers include Panasonic, Alcatel-Lucent, Cisco Systems, Motorola, Samsung, Sharp, Sony, Toshiba, GE, Honeywell and Siemens.

- Peter Clarke
  EE Times Europe
  With inputs from Stephen Padilla

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