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Microchip Technology announced a cash deal to acquire Microsemi on March 1, 2018, offering $68.78 per Microsemi share. Microchip described the announced consideration as approximately $8.35 billion in equity value and approximately $10.15 billion in enterprise value. The merger closed on May 29, 2018, making Microsemi a wholly owned Microchip subsidiary.
How much did Microchip pay for Microsemi?
The headline figure, $8.35 billion, was the transaction’s announced equity value—not its enterprise value. The offer was paid entirely in cash at $68.78 for each Microsemi share.
| Measure | Amount | What it means |
|---|---|---|
| Per-share consideration | $68.78 cash | Amount offered for each Microsemi share |
| Equity value | Approximately $8.35 billion | Value attributed to Microsemi’s equity in the March 1, 2018 announcement |
| Enterprise value | Approximately $10.15 billion | Transaction value after accounting for Microsemi’s cash and investments net of debt as of December 31, 2017 |
| Cash merger consideration reported at closing | Approximately $8.2 billion | Amount reported in Microchip’s SEC-filed Form 8-K as paid at the effective time; this is not the same measurement as the announced $8.35 billion equity value |
Because equity value and enterprise value use different calculations, they should not be used interchangeably. The $10.15 billion figure included the balance-sheet adjustments specified in Microchip’s announcement.
When did Microchip acquire Microsemi?
- March 1, 2018: Microchip and Microsemi announced their definitive merger agreement.
- April 13, 2018: Microchip reported expiration of the U.S. Hart-Scott-Rodino waiting period.
- May 15, 2018: The companies reported regulatory clearances in China, Japan, the Philippines, Germany and Austria.
- May 23, 2018: Taiwan clearance and Microsemi shareholder approval were reported.
- May 29, 2018: The merger closed. Microsemi survived as a wholly owned Microchip subsidiary, and trading in Microsemi common stock was set to cease.
Microchip said 99.5% of the Microsemi shares that voted supported the merger. The listed regulatory events are the milestones reported in the companies’ releases, not an exhaustive legal history of every jurisdiction involved.
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Why did Microchip buy Microsemi?
Microchip presented the acquisition as a way to combine complementary semiconductor portfolios, increase scale and diversify its end markets. In the March announcement, Microchip said the combined company would expand solutions for data centers, communications, defense and aerospace while adding complementary analog and mixed-signal products.
Complementary products and solutions
Microchip’s stated rationale was that joining the two portfolios would give customers more ways to build systems using products from one broader supplier. Microchip President and COO Ganesh Moorthy described the goal as offering “a richer set of solution options” through complementary products and end-market exposure.
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Scale and diversification
The completion release said the intended benefits included a stronger product portfolio, greater end-market diversification, improved operational capabilities and increased customer scale. These were management’s strategic aims at the time of the deal; the announcements do not independently establish that every anticipated benefit was achieved.
Expected cost savings
Microchip’s March 2018 announcement estimated $300 million in synergies in the third year after closing. That was a forward-looking estimate, not a verified result. The transaction materials cited here do not establish how much of that estimate was ultimately realized.
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Microsemi’s acquired business covered semiconductor and systems products used in communications, defense and security, aerospace and industrial applications. Microchip’s official Microsemi portfolio description includes these broad categories:
- High-performance and radiation-hardened analog and mixed-signal integrated circuits
- Field-programmable gate arrays (FPGAs), systems-on-chip and application-specific integrated circuits
- Power-management products
- Timing, synchronization and precise-time solutions
- Voice-processing products
- Radio-frequency products
- Discrete components
- Enterprise storage and communications products
- Ethernet products
- Power-over-Ethernet integrated circuits and midspans
- Custom design capabilities
This category list describes the portfolio brought into Microchip. It does not mean every legacy Microsemi model remains available or unchanged today.
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What happened to Microsemi after the deal?
At closing, Microsemi became a wholly owned subsidiary of Microchip. Microchip’s closing announcement characterized the acquisition as enhancing its product portfolio, end-market diversification, operational capabilities and customer scale. The transaction therefore changed Microsemi from an independent public company into part of Microchip’s corporate structure, while bringing its product lines and engineering capabilities into Microchip’s broader business.
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What the $8.35 billion headline does—and does not—tell you
- It is the announced equity value based on the cash offer for Microsemi shares.
- It is not the same as the approximately $10.15 billion enterprise value stated in the announcement.
- It does not prove that the projected $300 million in annual synergies was achieved.
- It does not by itself indicate that every Microsemi product remains on sale under its original branding.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
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