Chip makers profit from mergers by gaining reach into markets with a growing demand for connected smart devices. Atmel shareholders will receive $4.65 in cash and 0.112 of Dialog Semiconductor American Depository share for each Atmel common share, equal to $10.42 per Atmel share based on Dialog's closing price on September 18th.
Dialog plans to pay for the deal in cash, $2.1 billion in debt and about 49 million in Dialog American depository shares. The transaction will result in Atmel shareholders owning around 38 percent of the combined companies.
According to Jalal Bagherli, Dialog's chief executive, he believes that the acquisition will create better talent and extensive distribution channels in the semiconductor market.
This merger is expected to close in the first quarter of 2016 and is said to increase Dialog's earnings as early as 2017. Annually, cost savings will add up to $150 million within the span of two years.
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