Fairchild (San Jose, Calif.) acknowledged Tuesday (Dec. 8) that it received a rival bid, worth $21.70 per share, or about $2.46 billion. The ON Semi offer, announced Nov. 18, is worth about $2.4 billion.
Fairchild did not disclose the identity of the unsolicited bidder. The Bloomberg news service reported that the bid was made by a consortium that includes state-owned China Resources Holdings Co. and Hua Capital Management Ltd., an investment firm that is involved in the still-pending acquisition of OmniVision Technologies Inc. announced in April.
Fairchild said its board of directors would review the unsolicited proposal with the firm’s legal and financial advisors. The company said its board remains committed to the acquisition proposal by ON Semi.
The unsolicited bid comes amid a record-breaking year for mergers and acquisitions in the semiconductor industry. The total value of semiconductor industry acquisitions announced in 2015 stands at just over $102 billion, according to market research firm IC Insights Inc.Bidding wars over semiconductor firms have become more common as chip firms anxious to expand their scale and reach have ratcheted up the valuations of firms in the shrinking pool of acquisition targets.
The bid also underscores the interest of China’s state-backed firms in getting more involved in the semiconductor industry. Earlier this year, a separate consortium of Chinese firms acquired Integrated Silicon Solutions Inc. after a protracted bidding war with Cypress Semiconductor Corp. That deal closed Monday.
Another state-backed Chinese firm earlier this year made an informal proposal to acquire memory chip vendor Micron Technology Inc. for $23 billion. Those negotiations eventually broke down, largely over concerns that such a deal would not gain the approval of the Committee on Foreign Investment in the U.S.
According to the report by Bloomberg, the Chinese government has told local companies and the Chinese news media that it intends to spend more than $150 billion over 10 years to develop semiconductors.
Fairchild is among the semiconductor industry’s oldest and most venerable firms, tracing its roots back to 1957. Fairchild was acquired by National Semiconductor Corp. in 1987, but spun back out as an independent company in 1997.
— Dylan McGrath covers the semiconductor industry for EE Times.
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