Dialog Semi buys Atmel in IoT push

Dialog Semi buys Atmel in IoT push

By eeNews Europe

Dialog sells chips used to manage power in high-end smartphones from Apple and others. Atmel focuses on microcontrollers that provide computing power for many kinds of consumer and business hardware.

Dialog’s CEO, Jalal Bagherli, says the deal will help the company reduce its dependence on a few smartphone makers. In addition, acquiring Atmel’s customer base and line of products will make Dialog a major player in chips for connected cars, wearable devices and other networked IoT devices.

The transaction continues a string of combinations in the semiconductor business, where stock prices have been held down by slowing growth and companies see advantages in merging product lines and sales forces. In May Avago Technologies Ltd. agreed to buy Broadcom Corp. for $37 billion with Intel Corp. declaring a $16.7 billion deal to buy Altera Corp.

Dialog traces its lineage to 1981 and the European operations of a U.S. company called International Microelectronic Products Inc. Those operations were acquired by auto maker Daimler-Benz AG and later spun out, with Dialog going public on the Frankfurt exchange in 1999.

Atmel, founded in 1984, achieves about 70% of the company’s revenue from microcontrollers which are used in applications that include smartwatches, fitness devices and Arduino circuit boards. Atmel also sells chips to help manage sensors and touch screens in smartphones and tablets.

Bagherli points out that Atmel has also developed technology to provide security for Internet of Things applications, which he says, "is very, very key for IoT."

The combined company will have $2.7 billion in annual sales, according to Dialog. Atmel actually has more employees than its acquirer – 5,000 to about 1,500 – because Atmel operates factories to manufacture some of its chips. Until now Dialog had relied entirely on external manufacturing services.

Dialog expects the transaction to result in annual savings of $150 million within two years. The company will fund the takeover with existing cash, new debt and shares. Both companies’ boards of directors have approved the transaction, which is expected to close in the first quarter of 2016.

Dialog Semiconductor:
Atmel Corp.:

Related articles:
Avago-Broadcom deal to create networking, IoT chip giant
Intel buys Altera to create ‘new device types’ for data centers, IoT

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