Yet another Major Semiconductor Deal: Dialog Semiconductor Announces Acquisition of Amtel Corp. for US$4.6 bn

Dialog Semiconductor might not enjoy a brand recall as strong as Apple, but it is the former’s chip technology that powers the latter’s popular iPads and iPhones. Dialogue Semiconductor, a company based in the U.K. and listed on the Frankfurt Stock Exchange, will now shell out US$4.6 bn to buy out Amtel Corp., its rival in the semiconductor industry.

Besides Apple, Dialog’s clientele comprises heavyweights such as Samsung Electronics. Explaining the motivation behind what is being described as one of the largest deals in the semiconductor industry in recent months, Dialog said that it plans to diversify its current product portfolio to serve the automotive industry as well. Amtel is a U.S.-based semiconductor firm that is best known for its embedded systems for microcontrollers.

Given that Dialog’s clients are making headway in the Internet of Things arena, it wants to be prepared for the new business opportunities that will emerge from these market movements. According to sources close to the deal, the transaction is expected to receive the final stamp of regulatory approval by 2016 Q1. This evidently means that Dialog’s 2017 earnings will show a sharp spike. The company is confident that within two years from the closure of the deal, it will be able to report cost savings to the tune of US$150 mn.

Besides a diversified portfolio, Dialog expects the reach of its distribution channels to widen following the acquisition of Amtel.

The Dialog-Amtel deal is the most recent in a string of similar acquisitions and mergers reported from the semiconductor industry since 2014. According to a Bloomberg report, enterprises in the semiconductor industry have spent over US$31 billion on M&As in 2014. The total value of such deals in 2015 has already surpassed that of the previous year.

Several lucrative pockets are developing in the electronics and semiconductor industry, and leading players evidently want to be ready for the future.

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