Microchip drops bid to partner with Atmel

By Lisa Kerner

Charlotte, N.C., Feb. 10 - Microchip Technology Inc. announced that it is no longer interested in a potential transaction with Atmel Corp. due to "economic uncertainty" and "the lack of visibility that continues to exist with respect to Atmel's business" making it difficult to put a value on the company.

In addition, Microchip withdrew its slate of seven nominees for election to Microchip's board of directors.

"The global economy and the semiconductor business environment have deteriorated significantly since Microchip first made an offer of $5 per share on Oct. 1, 2008. Based on actual results and Atmel's first quarter 2009 guidance, Atmel's revenue will have declined more than 30% since then and the company is expected to lose money," Microchip president, chief executive officer and chairman Steve Sanghi said in a company news release.

In November, ON Semiconductor Corp. withdrew from its joint proposal with Microchip to acquire Atmel, and Microchip subsequently withdrew its $5-per-share offer for Atmel.

Prior to the withdrawal, Microchip and ON Semiconductor said they were prepared to take their $2.3 billion offer directly to Atmel's shareholders after it was rejected by Atmel's board.

Atmel, in response to Microchip's announcement, said it will focus on the continued execution of its transformation plan, which has already resulted in "substantial microcontroller revenue growth, market share gains and gross profit improvement."

According to an Atmel news release, the company's microcontroller revenues grew 14% in 2008 and full-year gross profit margins reached their highest level since 2000.

Atmel, based in San Jose, Calif., designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency components.

Microchip is a Chandler, Ariz.-based semiconductor producer.

ON Semiconductor is a Phoenix-based designer, manufacturer and marketer of power and data management semiconductors and standard semiconductor components.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.