ON Semi to Acquire AMIS with Stock; Expands Buyback

ON Semiconductor (ONNN) has entered a definitive merger agreement to acquire AMIS Holdings (AMIS) in an all-stock deal with an equity value of approximately $915 million. AMIS shareholders will receive 1.15 shares of ON Semi per common stock owned of AMIS, which as of ON's close of $8.82 on Wednesday, equals $10.14/share, a 38% premium. The Boards of both companies have approved the deal; it is expected to close in the first half of 2008. The transaction is projected to be accretive to 2008 EPS ex-amortization expenses and is expected to result in pre-tax cost savings of up to $50M by 2009.

"AMIS will immediately contribute exciting new products and capabilities in the medical and military/aerospace markets and will complement our existing automotive and industrial businesses," commented ON Semi CEO Keith Jackson. Separately, ON said it expanded its share repurchase authorization to 50M shares, from 30M previously. Over the next three years, ON plans to repurchase up to half of the 104M shares it will issue to acquire AMIS. The acquisition is the third semiconductor acquisition this week, following Lam Research's (LRCX) deal for SEZ (full story) and STMicro's (STM) agreement to acquire Genesis Microchip (GNSS, full story). Shares of ON Semi fell almost 5% Thursday. AMIS shares gained 29% to $9.47.

Sources: Press release, MarketWatch, Thomson
Additional Reading: ON Sinks on Weak Earnings, Outlook • ON Semiconductor Q3 2007 Earnings Call Transcript

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