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Dialog Semiconductor to buy Atmel for $4.6 billion

Staff writer |
German chipmaker Dialog Semiconductor has agreed to buy U.S. rival Atmel for $4.6 billion.

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Dialog said the deal would diversify its client base in automotive markets as well as network-connected chips used in industrial gear, also known as the "Internet of Things".

Atmel shareholders would receive $4.65 in cash and 0.112 of a Dialog Semiconductor American Depository Share for each Atmel common share, equivalent to $10.42 per Atmel share based on Dialog's closing price as of September 18. This represents a 43-percent premium over Atmel's closing price of $7.27 on Friday.

Dialog said it planned to pay for the deal via cash, $2.1 billion of debt and about 49 million Dialog American Depository Shares. Following the transaction, Atmel shareholders will own about 38 percent of the combined group, Dialog said.

The transaction, expected to close during the first quarter of 2016, will boost Dialog's earnings in 2017, Dialog said, and result in annual cost savings of $150 million within two years.

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