onsemi launches $6.9 billion bid for Allegro MicroSystems
onsemi has disclosed a proposal to acquire Allegro MicroSystems for USD 35.10 per share in cash, an offer that implies a total enterprise valuation for Allegro of USD 6.9 billion.
onsemi says it has been pursuing Allegro for the past six months, submitting multiple acquisition proposals. Onsemi is now offering USD 35.10 for each Allegro share, just a few months after Allegro turned down an offer that valued its shares at USD 34.50 each.
According to onsemi, the combination between the two companies would be a "natural strategic fit" given the companies' respective strengths within the automotive and industrial markets.
“We believe the combination of onsemi and Allegro would bring two highly complementary businesses together, benefitting our respective customers and delivering immediate value to Allegro shareholders,” said Hassane El-Khoury, President and CEO of onsemi, in a press release. “The Allegro team has built an impressive leadership position in magnetic sensing and power ICs for the automotive and industrial end-markets. Together, Allegro’s unique product portfolio and onsemi’s differentiated intelligent power and sensing technologies would create a diversified leader in automotive, industrial and AI data center applications.”
onsemi says that it has a clear plan to finance the transaction, leveraging committed financing, cash reserves, and available credit facilities. onsemi has also engaged a team of advisors to facilitate the due diligence process and finalise negotiations efficiently.
“While we would have preferred to reach an agreement with Allegro privately, the decision to make our proposal public reflects our conviction in the merits of a combined company, which we believe is in the best interests of Allegro and onsemi shareholders,” El-Khoury says, urging Allegro’s board and management to engage in discussions.
