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Texas Instruments agreed to acquire Unitrode Corporation in a stock-for-stock merger on July 25, 1999, and completed the deal on October 15, 1999. TI’s contemporaneous estimate put the planned issuance of about 8.9 million TI shares at about $1.2 billion, based on share prices as of July 23, 1999—not a cash payment or a current valuation.
What happened in the TI–Unitrode deal?
The July 25, 1999, merger agreement involved Texas Instruments (TI), Unitrode Corporation, and Unicorn Acquisition, a TI acquisition subsidiary. Under the agreement, Unicorn Acquisition would merge into Unitrode. Unitrode would survive the merger and become a wholly owned TI subsidiary. TI announced that the acquisition had been completed on October 15, 1999. TI’s merger agreement and proxy and its October 15 closing announcement document the agreement and completion.
How much did TI pay, and how was consideration calculated?
The consideration was TI stock, not a stated cash purchase price. In its second-quarter 1999 filing, TI described an expected issuance of approximately 8.9 million shares, valued at approximately $1.2 billion using TI share prices as of July 23, 1999. That is a contemporaneous estimate of the shares’ value at that date; it should not be read as an exact cash payment or a present-day valuation. TI’s second-quarter 1999 filing gives those figures.
The merger agreement did not promise a single fixed number of TI shares for every Unitrode share. It set a variable exchange ratio using the average of TI’s daily high and low share prices over 20 trading days, ending on the second trading day before closing. The agreement used a $38.60 reference value per Unitrode share and included adjustment bands, or a collar, that affected the ratio. The reference value therefore describes part of the formula, not a guaranteed cash value or an unchanging exchange ratio. The merger proxy and agreement describe the mechanics.
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Why did TI want Unitrode?
Unitrode designed and supplied power-supply control, interface, and battery-management components. TI said the acquisition would broaden its analog catalog by adding complementary capabilities in areas it described as important to portable devices, power systems, and interface applications. That was TI’s stated rationale for the transaction, not independent evidence that particular synergies were later achieved. TI’s closing announcement described Unitrode’s products and the company’s rationale.
What happened between the agreement and closing?
The deal proceeded through regulatory milestones before it closed:
- July 25, 1999: TI, Unitrode, and Unicorn Acquisition entered into the merger agreement. The proxy and agreement give the date and structure.
- August 17, 1999: the Federal Trade Commission’s transaction notice records that early termination was granted. The FTC notice provides the date.
- September 13, 1999: the proxy says Germany’s Federal Cartel Office approved the transaction. The merger proxy recounts the approval.
- October 15, 1999: TI announced completion. The closing announcement marks the completed deal.
What was Unitrode’s status after closing?
TI said Unitrode would continue from Merrimack, New Hampshire, as a wholly owned subsidiary. The transaction materials establish that immediate post-close arrangement; they do not, on their own, establish how Unitrode’s organization or product lines evolved later.
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