onsemi confirms $7bn hostile bid for Allegro Microsystems
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Onsemi has confirmed it is bidding to buy Allegro Microsystems with a hostile offer worth $6.9bn.
The deal values Allegro shares at $35.10, a 57% premium on the share price at the end of February but a small increase from its first offer. onsemi says it has made numerous attempts over the past six months to enter into constructive discussions regarding a potential transaction, with an initial offer of $34.50 per share in September last year.
The board of Allegro, which recently appointed a new chief executive, says the offer is inadequate.
“The Allegro Board of Directors reviewed the proposal, in consultation with its independent financial and legal advisors, and determined that the proposal was inadequate. Allegro does not intend to comment further on this matter unless it determines it necessary to do so,” it said.
“We believe the combination of onsemi and Allegro would bring two highly complementary businesses together, benefitting our respective customers and delivering immediate value to Allegro shareholders,” said Hassane El-Khoury, President and Chief Executive Officer of onsemi. “The Allegro team has built an impressive leadership position in magnetic sensing and power ICs for the automotive and industrial end-markets. Together, Allegro’s unique product portfolio and onsemi’s differentiated intelligent power and sensing technologies would create a diversified leader in automotive, industrial and AI data centre applications.”
“While we would have preferred to reach an agreement with Allegro privately, the decision to make our proposal public reflects our conviction in the merits of a combined company, which we believe is in the best interests of Allegro and onsemi shareholders. We urge the Allegro Board and management team to engage in good faith discussions with onsemi’s management team regarding the proposed transaction, which maximizes value for Allegro shareholders,” said El-Khoury.
Onsemi says the Allegro product line complements its intelligent power and sensing for automotive, industrial and AI data centre applications, which came from the acquisition that include Fairchild for power, Quantenna for WiFi, GT Advanced Technology for SiC materials and last year, SWIR Vision Systems for sensing. It has also been selling off older fabs in the US, Japan and Europe that came with the various acquisitions.
onsemi has detailed its approaches to Allegro but hasn’t had engagement for multiple cash offers in recent months.
www.onsemi.com; www.allegromicro.com
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