Sweet Deal; Nat Semi to be acquired by TI, lifts Semiconductor Stocks

April 5th, 2011 | by Jaxon Hewlett |

National Semiconductor Corp. (NYSE: NSM) shares soared more than 70% today ater the company agreed to be acquired by Texas Instruments Inc. (NYSE: TXN). The news was enough to drive gains for the overall semiconductor industry.

Texas Instruments will acquire National Semiconductor for $25 per share in cash. The transaction has been valued at $6.5 billion and will combine two of the biggest companies in the analog semiconductors space. The announcement of the deal has sent other semiconductor stocks higher as well in today’s trading.

Rich Templeton, chairman, president and CEO of Texas Instruments, said that the acquisition is about strength and growth. Templeton said that National Semiconductor has an excellent development team and its products combined with those of Texas Instruments offer customers an analog portfolio of unmatched depth and breadth.

National Semiconductor CEO Don Macleod, meanwhile, said that the two companies complement each other very well and that the deal has provided National Semiconductor with a platform to improve its strong and highly profitable analog capability.

Texas Instruments is currently a market leader in the analog semiconductor sector, with 2010 analog revenue of $6 billion, which represents 14% of the total market. National Semiconductor, meanwhile, had 2010 revenue of $1.5 billion.

National Semiconductor shares have reacted positively to the deal, and at last check, they were up 71.43% to $24.12, with volume up from daily average of 4.34 million to 125.54 million. The stock touched a 52-week high of $24.14 in today’s trading. Texas Instruments shares have also reacted positively to the deal, and at last check they were up 1.93% to $34.77, with volume up from daily average of 9.41 million to 19.64 million.

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