Cyprus Semiconductor to acquire Spansion for $4 billion
Near the end of a robust year in tech mergers, Cypress Semiconductor has announced plans to merge with Spansion, a flash memory microcontroller firm. The semiconductor company already manufactures technology for Bluetooth and touchscreen capable devices, and acquired Spansion for a reported $4 billion, according to GuruFocus.
Insiders said the sale would maximize value for shareholders and broaden the firm's footprint as it expands into new technologies. According to T.J. Rodgers, the CEO of Cyprus, the companies are both ranked first in their respective fields and the merger allows the firms to continue expanding into embedded processing. As a boon for shareholders in Spansion, a press release announced that each would receive 2.457 shares of Cyprus for every existing share of Spansion. Rodgers will continue to serve as CEO for the newly merged company, when the deal is closed early next year.
"Bringing together these high-performing organizations creates operating efficiencies and economies of scale, and will deliver maximum value for our shareholders, new opportunities for employees and an improved experience for our customers," Spansion CEO John Kispert said in a statement.
The two Silicon Valley based tech companies will merge in an "all-stock, tax-free transaction valued at approximately $4 billion." A press release from Cypress detailed that Spansion shareholders "will receive 2.457 Cypress shares for each Spansion share they own." In addition, "shareholders of each company will own approximately 50 percent of the post-merger company." There will be an $0.11 per share quarterly dividend to all shareholders. The deal is expected to close in the first half of 2015.
Currently, Spansion's market share includes technology for cars, personal devices and home appliances. The Silicon Valley neighbors will exist together under the Cyprus name.