Atmel has already agreed a deal to be acquired by Dialog Semiconductor plc (London, England) but Atmel said it would look at the counter offer (see Dialog waits as Atmel considers counter bid). Dialog’s bid – of $4.65 per share in cash and 0.112 of a Dialog American depositary share for each Atmel share – was valued at about $4.6 billion when it was originally made in September 2015 (see Dialog Semi buys Atmel in IoT push). However, the value of the bid has declined along with Dialog’s share price since then.
Microchip, under chairman and CEO Steve Sanghi has grown both organically and through a series of small- to medium-sized acquisitions. Atmel has a similar product profile to Microchip although it uses its own AVR architecture at 8-bit and ARM cores for 32-bit microcontrollers. So while there is product overlap an acquisition would strengthen Microchip’s hand in microcontrollers and in automotive applications, which may be necessary after the merger of NXP and Freescale.
Atmel said it continues to recommend the merger agreement with Dialog while it considers the rival offer. Atmel shareholders are set to vote on the Dialog deal in March 2016. Microchip and On Semi launched a joint unsolicited bid of $2.3 billion for Atmel in October 2008. The offer was rejected and later withdrawn.
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