Mergers & acquisitions

Fairchild Accepts ON Takeover Offer

Fairchild Semiconductor has decided to accept a takeover by ON Semiconductor in favor of a subsequent and larger unsolicited takeover proposal from China.

ON Semiconductor Corp. (Nasdaq: ONNN)'s bid for Fairchild Semiconductor Inc. (Nasdaq: FCS) was for $20 a share. The competing offer, reported by Bloomberg to be from China Resources Holdings working with Hua Capital Management, was for $21.70 a share. (See And ON to the Next Merger: Fairchild).

Respectively, the totals for the two offers would be about $2.4 billion and $2.46 billion.

Fairchild's board of directors said the Chinese offer "would not reasonably be expected to result in a 'Superior Proposal' as defined in Fairchild’s Agreement and Plan of Merger with ON Semiconductor."

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Chinese companies have been increasingly participating in the M&A activity swirling around the semiconductor and components sectors. In April, Hua Capital bought OmniVision Technologies Inc. (Nasdaq: OVTI), a maker of CMOS imaging chips based in California, for $1.9 billion. Tsinghua offered to buy Micron Technology Inc. (Nasdaq: MU), but was been rebuffed.

China has a stated goal of building a larger semiconductor industry, but so too does South Korea. SK is overtly looking for investments too.

— Brian Santo, Senior Editor, Components, T&M, Light Reading

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