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Texas Instruments To Acquire National Semiconductor For $25/Share, 80% Premium

Tyler Durden's picture


Yet another notable deal, with an 80% premium, to be funded by cash and debt. Mostly debt. Very cheap debt.

Press Release:

DALLAS and SANTA CLARA, Calif., April 4, 2011 /PRNewswire/ -- Texas Instruments Incorporated (TI) (NYSE:TXN - News) and National Semiconductor (NYSE:NSM - News) today announced they have signed a definitive agreement under which TI will acquire National for $25 per share in an all-cash transaction of about $6.5 billion.
 The acquisition combines two industry leaders in analog
semiconductors, each with unique strengths in delivering products to
improve performance and efficiency and convert real-world signals in
electronic systems.  The boards of directors of both companies have
unanimously approved the transaction.

"This acquisition is about strength and growth," said Rich Templeton,
TI's chairman, president and chief executive officer.  "National has an
excellent development team, and its products combined with our own can
offer customers an analog portfolio of unmatched depth and breadth.  In
recent years, National's management team has done an outstanding job of
improving margins and streamlining expenses, which upon close will
increase TI's profitability and earnings per share, excluding
transaction costs.  Our ability to accelerate National's growth with our
much larger sales force is the foundation of our belief that we can
produce strong returns on our investment.  The combined sales team will
be 10 times larger than National's is today, and the portfolio will be
exposed to more customers in more markets."  

"Our two companies complement each other very well," said Don Macleod,
National's chief executive officer.  "TI has much greater scale in the
marketplace, with its larger portfolio of products and its large global
sales force.  This provides a platform to enhance National's strong and
highly profitable analog capability, power management in particular,
leading to meaningful growth."

Each company has unique strengths.
 Among them are the breadth of TI's 30,000 analog products, extensive
customer reach, and industry-leading manufacturing including the world's
first 300-millimeter analog factory.  National brings a portfolio of
12,000 analog products, a strong position with customers in the
industrial power market, and excellent customer design tools.  Upon
close of the transaction, National becomes part of TI's analog segment,
and sales of analog semiconductors will represent almost 50 percent of
TI's revenue.

The combined company also will benefit from National's manufacturing operations, located in Maine, Scotland and Malaysia,
which TI will continue to operate.  Each site has additional capacity
to increase production.  National's headquarters will remain in Santa Clara, California.

Under terms of the agreement, National stockholders will receive $25
in cash for each share of National common stock they hold at the time
of closing.  TI expects to fund the transaction with a combination of
existing cash balances and debt.  The acquisition is subject to
customary closing conditions, including review by U.S. and international
regulators and approval by National's shareholders.  The transaction is
expected to close in six to nine months.

The market for analog semiconductors was $42 billion in 2010.  TI is the market leader with 2010 analog revenue of $6.0 billion, or 14 percent of the market.  National's revenue in calendar year 2010 was about $1.6 billion, or 3 percent of the market.

For more information, see or

Investor webcast

Today at 5:30 p.m. EDT / 4:30 p.m. CDT / 2:30 p.m. PDT,
TI and National will hold a live audio webcast for financial analysts
and stockholders to discuss the agreement to acquire National.

The webcast will be hosted by the CEOs of each company, Rich Templeton and Don Macleod, and is accessible at and


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Mon, 04/04/2011 - 16:13 | 1134089 the not so migh...
the not so mighty maximiza's picture

Holy semi chips!!!

Mon, 04/04/2011 - 16:30 | 1134191 Highrev
Highrev's picture

Very cheap debt.

To be paid back with even cheaper dollars!


That's the name of the game. Jump on Ben's Bandwagon now before it's too late!



Mon, 04/04/2011 - 18:00 | 1134609 johnQpublic
johnQpublic's picture

funded by debt


that is an oxymoron isn't it?

i just cant get by the thought of funding something with a negative.....just no future for me in economics

Mon, 04/04/2011 - 19:13 | 1134822 Hard1
Hard1's picture

Right, when both cash and debt are both free and worthless, It doesn't matter what premium you paid, you just made a killer deal, getting something for nothing. 

Tue, 04/05/2011 - 00:28 | 1135692 defn8Dog
defn8Dog's picture

Bitchezz. There.

Mon, 04/04/2011 - 16:16 | 1134101 ZeroPower
ZeroPower's picture

Would be very interesting to match the T&S on NSM during the last 3 minutes of trade - crazy volume, much larger than average and not only due to it being end of day liquidity burst.

No frontrunning. No, not ever.

Mon, 04/04/2011 - 16:14 | 1134103 mule65
mule65's picture

All cash.

Mon, 04/04/2011 - 16:20 | 1134140 Tyler Durden
Tyler Durden's picture

Really? We were under the impression debt means debt: "TI expects to fund the transaction with a combination of
existing cash balances and debt." Thanks for the correction.

Mon, 04/04/2011 - 16:26 | 1134166 Thomas
Thomas's picture

I did a little analysis of the balance sheets on the DOW. Almost twice as much debt as cash. Most analysts think that a line of credit is "as good as cash." Thus, those amazing corporate balance sheets aren't really so amazing afterall. Go figure.

Mon, 04/04/2011 - 16:33 | 1134204 Highrev
Highrev's picture

It won't be long until it's considered cash flow.



Mon, 04/04/2011 - 18:11 | 1134649 Rogerwilco
Rogerwilco's picture

Like the "cash flow" banks generate today from neg-am mortgages? Write enough of 'em and the board can declare some sick bonuses up and down the line.

Mon, 04/04/2011 - 16:28 | 1134186 Hephasteus
Hephasteus's picture

Ya but TI is co-signing the loan which neither party can pay back. Hopefully that will work better than a Blythe Masters silver hedge.

Mon, 04/04/2011 - 16:33 | 1134207 mule65
mule65's picture

All cash as far as NSM shareholders are concerned.

Mon, 04/04/2011 - 17:45 | 1134557 homersimpson
homersimpson's picture

Yes I'm sure you'd trade me your cash for IOUs *rolls eyes*

Mon, 04/04/2011 - 16:45 | 1134267 trav7777
trav7777's picture

Debt IS cash, nigga

Well ain't it???

Mon, 04/04/2011 - 16:16 | 1134112 Id fight Gandhi
Id fight Gandhi's picture

Anyone see any funny options action?

Mon, 04/04/2011 - 16:19 | 1134131 mule65
mule65's picture

Looks pretty clean to me.

Mon, 04/04/2011 - 16:16 | 1134114 sabra1
sabra1's picture

so, if everyones in debt, we can buy more stuff?

Mon, 04/04/2011 - 16:20 | 1134128 Id fight Gandhi
Id fight Gandhi's picture

Still cheaper than buying chipole or price line. You'd need deep pockets for buying them out.

Mon, 04/04/2011 - 17:30 | 1134503 disabledvet
disabledvet's picture

i agree with that.  which means "more up, up and away" for these two.  "where angels fear to tread" there's always a "hey! you over there!  start...

Mon, 04/04/2011 - 16:19 | 1134132 SwingForce
SwingForce's picture

Incredible new way to get stocks to rise. Was this technique available in 2009?

Mon, 04/04/2011 - 16:21 | 1134133 Sudden Debt
Sudden Debt's picture


I even heard they have some with SOLAR POWER!!



Mon, 04/04/2011 - 16:28 | 1134178 Thomas
Thomas's picture

They can now even do square roots.

Mon, 04/04/2011 - 17:05 | 1134383 InconvenientCou...
InconvenientCounterParty's picture

TI has a new calulator for banking applications. Whenever a negative number appears, just hit the "innovate" button. Apparently "innovate" is a new math operator of some sort.

Mon, 04/04/2011 - 16:32 | 1134196 Hephasteus
Hephasteus's picture

People to make up numbers. Calculators to pretend they weren't made up. It's the perfect merger of liar and machine.

Steve Wozniak once said that computers were like bicycles for the mind. They allowed people to be more efficient.

If the mind's a liar. The bicycle still works.

Mon, 04/04/2011 - 16:33 | 1134211 SgtSchultz
SgtSchultz's picture

I hear the next big thing in calculators is a Roman numeral version - no bothersome negative numbers. 

Mon, 04/04/2011 - 16:44 | 1134263 Long-John-Silver
Long-John-Silver's picture

How would ZH filter without negative numbers?

Mon, 04/04/2011 - 17:34 | 1134511 disabledvet
disabledvet's picture

or a zero.

Mon, 04/04/2011 - 16:19 | 1134135 dogismyth
dogismyth's picture

SOS...more consolidation with zero consideration for competition and antitrust laws.  Blackrock once again major holders in both entities.  But I'm sure its all coincidental.

Mon, 04/04/2011 - 16:21 | 1134137 Spalding_Smailes
Spalding_Smailes's picture

But, but .... I thought this was a depression ?

Do they not have any advisors who have buried canned food, cases of bottled water, tons of potatoes on said staff ....

This is crazy with 2012 right around the corner .... Lol

Mon, 04/04/2011 - 16:23 | 1134148 Tyler Durden
Tyler Durden's picture

Actually the game is called "get your cheap debt financing while rates are still low."

Mon, 04/04/2011 - 16:27 | 1134179 Sudden Debt
Sudden Debt's picture

I was actually thinking about getting a loan once to buy more PM's, but even when I'm a believer, that's still one step to far for me.


Mon, 04/04/2011 - 16:34 | 1134208 magpie
magpie's picture

Hope you didn't offer your PMs as collateral...

Mon, 04/04/2011 - 18:59 | 1134784 DosZap
DosZap's picture


The devil made you think it.

Smart move NOT doing a dumb move.

Mon, 04/04/2011 - 16:32 | 1134206 Spalding_Smailes
Spalding_Smailes's picture

Did you junk me too ? 


Come on, this is the best time for securing said debt .....


What's the worst that could happen ? Joe Six Pack and Wendy Wine Cooler have their backs ....

Mon, 04/04/2011 - 16:36 | 1134225 taraxias
taraxias's picture

You're a junkoholic fucktard. That's the only reason you post.

"but, but, but why are you junking me, you all know I'm an asshole"

Mon, 04/04/2011 - 16:50 | 1134282 Spalding_Smailes
Spalding_Smailes's picture

Hey look, its a real corn-fed moron !!!


I get junk'd by the doomer sect, big fucking deal, 7-10 morons with gold and silver stocks, pepperoni in the crawl space and end the fed bumper stickers. I bet your whore mother got a tramp stamp for her 50th birthday above her ass that say .. " Open House Party "

Mon, 04/04/2011 - 18:10 | 1134643 NidStyles
NidStyles's picture

At least we know the difference between past and present tense.

It's also amusing that you can so categorically say everyone that has seen certain evidence of rough economic times ahead is a moron. Let me guess, you don' think you'll have any difficulty with the aspect of war breaking out all over the little area that support's the majority of your dietary and consumption based need's?

I guess you never sat down and wondered how those acre's of food, that you shove down your throat, came to be. I'm sure the farmer's will be willing to trade you stock option's for food. That is, just as soon as you get out there in the field and start sowing the field's.


Nope, we are the moron's that actually know that mash oil is mixed in with fertilizer to increase the Nitrification of the soil. The same people that are also aware that tractor's are fuelled by diesel.

Mon, 04/04/2011 - 16:23 | 1134146 filletandrelease
filletandrelease's picture

I am new to trading, will salsa stocks go up in sympathy with the chip stocks?

Mon, 04/04/2011 - 16:30 | 1134189 Sudden Debt
Sudden Debt's picture

to dip or not to dip, that's dips.

Mon, 04/04/2011 - 17:27 | 1134491 mynhair
mynhair's picture

Just BTFD.  It's all good.

Mon, 04/04/2011 - 16:27 | 1134165 Ben Graham Redux
Ben Graham Redux's picture

Two losers go to bed together - big deal.  National Semi has been dead for decades - TI just a bit of life left.

Mon, 04/04/2011 - 16:39 | 1134245 DoChenRollingBearing
DoChenRollingBearing's picture

I guess I have to sell my Texas Instruments now too.  So few attractive stocks to buy out there.


Mon, 04/04/2011 - 16:27 | 1134168 Ruffcut
Ruffcut's picture

This M & A activity has some validity, but the markets like to do these deals to inflate values and make nice coin to front run it, high fees and able to print money through fractional reserve lending.

"what happened to those good ole deals?"

Good deals for them, but bad for 300 million of the rest of us.

Mon, 04/04/2011 - 16:28 | 1134174 hack3434
hack3434's picture

Why stop at 80% premium? good lord...

Mon, 04/04/2011 - 16:26 | 1134175 eatthebanksters
eatthebanksters's picture

the big consolidate and get there any possibility that the midsized and smaller players can compete anymore? Whatever happened to the economic theory of perfect competition?  Down what road is our government taking us?

Mon, 04/04/2011 - 17:29 | 1134497 mynhair
mynhair's picture

Duh, the Highway to Hell.

Mon, 04/04/2011 - 18:24 | 1134664 Rogerwilco
Rogerwilco's picture

Same sentiment, better delivery (IMHO):

And all the roads jam up with credit
And there's nothing you can do
It's all just bits of paper
Flying away from you
Look out world take a good look
What comes down here
You must learn this lesson fast
And learn it well
This ain't no upwardly mobile freeway
Oh no, this is the road to Hell

Mon, 04/04/2011 - 16:27 | 1134182 drink or die
drink or die's picture

I follow the analog semis pretty close (I work for one), and I believe NSM has recovered the WORST out of all the major players from the dip in 2008. 


A cheap deal for TXN, but there is a reason they have done so poorly over the past 2 years...

Mon, 04/04/2011 - 16:35 | 1134217 lieutenantjohnchard
lieutenantjohnchard's picture

back in the paper ticket days i almost made an error placing a trade fror texas instruments. put on the ticket tex vs txn. saved by the wire operator.

Mon, 04/04/2011 - 16:33 | 1134218 RobotTrader
RobotTrader's picture

I wonder if TXN or somebody else is going to make a $100/share bid for TZOO tomorrow?

Up another 9% today after a huge 600% run in 6 months.


Mon, 04/04/2011 - 16:45 | 1134261 max2205
max2205's picture

Think higher...$200?! BIDU buys or SOHU

Mon, 04/04/2011 - 16:46 | 1134262 Highrev
Highrev's picture

Could this be the spark that lights the fire under the futures tonight to get things up through immediate resistance?

It's clearly a toast to further leveraging, and what better way to celebrate?

(It's going to be interesting to see how the market responds especially since the semi's were an important laggard.)

Mon, 04/04/2011 - 17:21 | 1134459 Id fight Gandhi
Id fight Gandhi's picture

Only proves that QE is inflating worthless assets. Shit price line at new highs too. Who cares?

Mon, 04/04/2011 - 19:45 | 1134933 The Axe
The Axe's picture

This is chapter 2.....same story.....Christ   idiots short this thing are well idiots...This stock could go way past its old 2005 high......stock has no options for a fucking reason..

Mon, 04/04/2011 - 16:37 | 1134236 gina distrusts gov
gina distrusts gov's picture

National will end up gutted then cast off as a loosing company  with horrendous job losses

 But that is how this world  has operated from ronnie rayguns time.

Mon, 04/04/2011 - 18:29 | 1134694 Rogerwilco
Rogerwilco's picture

In a few years a Chinese trading company will pick the bones of TI and get the IP for pennies.

Mon, 04/04/2011 - 16:41 | 1134246 RobotTrader
RobotTrader's picture

After Gary Kaltbaum was dissing the SMH on Friday, and with INTC getting pummeled today, I thought for sure some Chop House was going to drag out Dan "The Greaseman" Niles for a sector upgrade.

Note how INTC's yield is now around 3.7%, and last quarter was one of its biggest ever.

Mon, 04/04/2011 - 16:49 | 1134279 trav7777
trav7777's picture

3.7 is a fine yield for a chip tech stock

Mon, 04/04/2011 - 16:41 | 1134254 max2205
max2205's picture

Me thinks the buyer of those SPY April 130 puts is FUCKED!!

I am convinced the NSM deal is why someone wrote these. Ya think!?

Mon, 04/04/2011 - 17:00 | 1134349 mule65
mule65's picture

Seller is looking good.  DOW 12,400 green lights everything.

Mon, 04/04/2011 - 16:52 | 1134298 Seasmoke
Seasmoke's picture

what did we go back in time to 1985 ?

Mon, 04/04/2011 - 16:54 | 1134310 max2205
max2205's picture

I know.. Send me a copy of tomorrow's WSJ

Mon, 04/04/2011 - 16:56 | 1134337 realitybiter
realitybiter's picture

I thought buying Freescale being bought in 2006 was the dumbest idea I had seen in the chip sector. And yet, a new contender arises.

Chips looked mighty toppy as it was. This seals the deal.

Mon, 04/04/2011 - 17:00 | 1134364 mynhair
mynhair's picture

"This acquisition is about strength and growth,"

Yeah, no strength and lack of organic growth.

Mon, 04/04/2011 - 17:43 | 1134533 tallen
tallen's picture

80% PREMIUM? TI must have some great people at negotiating. Obviously high on some hopimum that the economy is gonna recover.

This makes the .com bubble look like nothing in comparison.

If only they'd taken over Micron. I was so close to investing in this company. Still up on Micron tho.

Mon, 04/04/2011 - 17:45 | 1134544 winks
winks's picture

I used to work in M&A and we were taught to preserve at least some of the upside for our own shareholders-not pay it all out to the party being acquired. NSM was trading for $14 and change before the announcement. An 80% premium leaves NOTHING for the TI shareholders.

The investment banks did some job selling this to the TI board-they won't be around long . 

Mon, 04/04/2011 - 21:00 | 1135184 honestann
honestann's picture

More bad news, more concentration.

I've designed computers and all sorts of electronics for decades, and on the whole, TI has been "one of the good guys".  But this news is bad.

Organic growth from internal creativity is good, and leads to more and better variety of products and more affordable prices.  Growth by swallowing competitors [with similar sets of products] is bad, and leads to less creativity, alternate source problems, and higher prices.

Yet another consequence of predatory concentration of power and wealth via federal reserve manipulation and fractional reserve practices.

Mon, 04/04/2011 - 21:38 | 1135315 ThirdCoastSurfer
ThirdCoastSurfer's picture

Strange timing given the situation in Japan.

One would think that analog anything has long since been replaced by digital everything but the former still plays a prominent role in power management -even within digital microprocessors. 

Still, few industries require such elaborate calibration and, ironically, the threat of a long period of rolling blackouts may have created a marriage of necessity more than that of true synergies within this ultra-competitive industry.

Mon, 04/04/2011 - 22:21 | 1135428 MSimon
MSimon's picture

I have been using National parts since the early 70s. I'm going to miss them.

Sat, 04/09/2011 - 22:03 | 1154249 thames222
thames222's picture

Yes!!! This is awesome, my stock in T.I. is finally paying off :)  after such a long road, finally some breathing room.

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