Report: Cypress preps bid to snatch Atmel from Dialog

September 28, 2015 // By Peter Clarke
Cypress Semiconductor Corp. is preparing an offer in an attempt to outbid Dialog Semiconductor plc for Atmel Corp., according to a Reuters report that referenced unnamed sources.

On Sept. 20, Dialog (Reading, England) and Atmel (San Jose, Calif.) announced an agreed a $4.6 billion cash-and-stock deal to consolidate and capture a larger slice of the Internet of Things (IoT) market earlier this month (see Dialog to acquire Atmel for $4.6 billion ).

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. At the time Jalal Bagherli, Dialog's CEO, said: "We won the second round of bidding," said Bagherli.

Nonetheless Cypress is said to be working on an offer to acquire Atmel and to disrupt Dialog's expansion plans. The activity is indicative of a wave of consolidation that the semiconductor sector is experiencing.

The report said 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 capitalization is similar to that of Dialog's at $2.73 billion, both considerably smaller than that of the takeover target Atmel, which stands at $3.46 billion. Were Cypress to succeed 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.

Cypress is already digesting a merger with memory company that completed in March 2015.

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Reuters report

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