It has been almost 10 months since ON Semiconductor Corporation opted to acquire Fairchild Semiconductor International, Inc. for $2.4 billion, but the deal has finally been completed.
After going through the ropes of having to fend off other suitors for the company, Fairchild decided to go with ON Semiconductor. But the company has been waiting for regulatory approval from not just the U.S. but also China, where ON finally received the go-ahead from the Ministry of Commerce.
ON says the acquisition will help the company move further toward becoming a leader in power management and analog semiconductors.
“Fairchild provides us a platform to aggressively expand our profitability in a highly fragmented industry,” says Keith Jackson, president and CEO of ON Semiconductor. “With the addition of Fairchild, our industry-leading cost structure has further improved in a significant manner, and we are now well positioned to generate substantial shareholder value as we integrate operations of the two companies.”
Following the completion of the agreement, ON expects to achieve an annual cost savings run rate of $160 million by the end of 2017, $200 million by the end of 2018, and $225 million by the end of 2019.
ON has also redesigned its organizational structure to better align with its product portfolio, with Bill Hall heading up the Power Solutions Group, Bob Klosterboer heading up the Analog Solutions Group, and Taner Ozcelik heading up the Image Sensor Group. ON’s System Solutions Group will be absorbed by the other three groups.
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