ON Semiconductor Corp. purchased Fairchild Semiconductor International, Inc. in a $2.4 billion cash acquisition.
“The acquisition of Fairchild is a transformative step in our quest to become the premier supplier of power management and analog semiconductor solutions for a wide range of applications and end-markets,” said Keith Jackson, chief executive officer of ON Semiconductor.
“Fairchild provides us a platform to aggressively expand our profitability in a highly fragmented industry. 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.”
ON received confirmation Friday that clearance related to the acquisition’s completion had been obtained from China’s Ministry of Commerce and ON was entitled to close the transaction under PRC law.
ON agreed to purchase shares of Fairchild at $20 per share in cash.
The acquisition, according to ON, is expected to be accretive on a GAAP EPS basis in the second half of 2017 and immediately accretive on a non-GAAP basis.
“ON Semiconductor expects to achieve 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,” said a statement from the company. “The cost savings targets are based on Fairchild’s 2015 annual results.”
ON Semiconductor is based in Phoenix.
Filed Under: Materials • advanced