ON Semiconductor Corp. agreed to acquire Fairchild Semiconductor International Inc. for $2.4 billion, the latest in a spate of more than $90 billion of M&A or other deals in the global semiconductor industry in the last 12 months as the market is consolidating to face rising production costs.
ON Semi will pay $20 a share in cash for Fairchild, a 12% premium to the stock’s close in New York on Tuesday. The price is 41% above Fairchild’s closing level Oct. 13, the day before reports that the company was seeking a buyer. Fairchild, based in San Jose, California, is a leader in the power semiconductor industry. They were at the origin of most power devices we see today but also gave birth to many semiconductor companies. Intel, AMD, National semiconductor among others are actually spin-offs from Fairchild.
You can check our article on the history of Fairchild and how fairchildren made the semiconductor industry back in the 60’s and 70’s.
ON Semi took over Fairchild as it was one of the two challengers in position. Rumors had that Infineon was running for this acquisition too. But the recent huge cheque paid to acquire International Rectifier and the difficulty to deal with so many management changes in such a short period of time has probably slowed down Infineon’s decision. STMicroelectronics could also has studied the option to buy ON Semi. But they explained during an analyst in October, that they had no plans of acquisition. Their financial position calls other decisions than M&A.