A pair of semiconductor vendors are becoming one after Microchip Technology Inc. has agreed to acquire Microsemi Corp. for about $8.4 billion.
The deal will help Microchip to expand its offering in the data center, communications, defense and aerospace markets. The acquisition will allow Microchip to combine its embedded control market devices with Microsemi’s power, security and performance ICs.
Microchip anticipates achieving an estimated $300 million in synergies in the third year after the close of the transaction. Microchip will finance the deal through $1.6 billion in cash, about $3.0 billion from Microchip’s existing line of credit and about $5.0 billion in new debt.
The deal has been approved by the Microchip Board of Directors and awaits approval by Microsemi stockholders and regulatory approvals. Assuming these are approved, the acquisition is expected to close in the second quarter of this year.