On Semiconductor Corp., Phoenix, Ariz., and Fairchild Semiconductor Intl. Inc., South Portland, Maine, announce plans for On Semiconductor to acquire Fairchild for $20.00 per share in an all-cash transaction valued at approximately $2.4 billion. The acquisition creates a leader in the power semiconductor market with combined revenue of approximately $5 billion, diversified across multiple markets with a strategic focus on automotive, industrial, and smartphone end markets.
“The combination of On Semiconductor and Fairchild creates a power semiconductor leader with strong capabilities in a rapidly consolidating semiconductor industry”, said Keith Jackson, president and chief executive officer of On Semiconductor. “Our plan is to bring together two companies with complementary product lines to offer customers the full spectrum of high, medium and low voltage products.”
On Semiconductor anticipates achieving annual cost savings of $150 million within 18 months after closing the transaction. On Semiconductor intends to fund the transaction with cash from the combined companies balance sheet and $2.4 billion of new debt. The debt financing commitment also includes provisions for a $300 million revolving credit facility which will be undrawn at close. On Semiconductor remains committed to its share repurchase program, and the agreed upon financing provides flexibility to continue share repurchases going forward.
