SAN JOSE, Calif., Oct. 2 /PRNewswire-FirstCall/ -- Atmel® Corporation (Nasdaq: ATML - News) today confirmed that it has received an unsolicited proposal from Microchip Technology Inc. (Nasdaq: MCHP - News) and ON Semiconductor (Nasdaq: ONNN - News) to engage in negotiations for a three-way agreement to acquire Atmel at $5.00 per share, subject to conditions, including the sale of assets, due diligence, and financing. Atmel's Board of Directors, consistent with its fiduciary duties and in consultation with its independent financial and legal advisors, will review and consider the proposal in due course.
I really like the Atmega and the like how they are - I really hope that this does not indicate that IF this occurs, that the Atmel MCU would go the way of the Microchip ones... 
Everytime I hear about a company I like being bought out, I always get paranoid though....
It's unlikely this would have any effect on either of the product lines, but imagine an AVR with DSP like the DSPIC...I know Atmel has the ARM + DSP but it's not quite as accessible.
But the downside of it might be a simili-monopoly on the MCU market, and especially on the beginner/DIY market. I just hope that this will not increase the final price of the chips
Hobby users may like PIC and AVR microcontrollers, but we are by no means the major consideration for both companies. For example, the company I work for has put millions of ATmega chips into products. Other companies use PICs. And competition cannot die because there's also the TI lineup of microcontrollers, Hitachi SH, various 8051 clones by many manufacturers, Freescale's huge lineup of microcontrollers, Cypress, Holtek, Renesas, ST, and so on. Many of these microcontrollers are more widespread than even the PIC series.
I was into the Freescale HC08 series before I was into AVRs, so I'd have no problem switching if it became necessary. I've also been happy with the TI MSP430 chips.
There shouldn't be a significant monopoly effect, I'd only worry about hardware changes or a move to a less open development cycle.
but we are by no means the major consideration for both companies
I don't think we are ANY consideration at all. The hobby marked contributes a negligible amount to the bottom line. While there is a great community around this device my experience with Atmel flash in a mass produced item (that's a million units) in the early part of this decade leave me with not the best impression of their skills. The end of line test on flash chips consisted of erasing it and checking for all zeros and programming all ones into it. That was it!!!
Needles to say that we had a 25% return rate on that product.
Some one once told me (at a conference in Las Vagas) that Intel employed all the people not smart enough to work for Microsoft and that Atmel employed all the people not smart enough to work for Intel.
my experience with Atmel flash in a mass produced item in the early part of this decade leave me with not the best impression of their skills. The end of line test on flash chips consisted of erasing it and checking for all zeros and programming all ones into it. That was it!!!
Needles to say that we had a 25% return rate on that product.Some one once told me (at a conference in Las Vagas) that Intel employed all the people not smart enough to work for Microsoft and that Atmel employed all the people not smart enough to work for Intel.
And those not smart enough to work for Atmel work for companies that use Atmel flash?
Just joking mike, couldn't resist 
Yes, point was that none of the engineers wanted to use it but we were told we had to by the Technical Director, he is not there any more and we are. ;D
Still lucky it wasn't my project I only came in playing the part of the Cavalry and found out the information above.
I don't think we [the hobbyist market] are ANY consideration at all.
I dunno. There's this thing called "mindshare." One can argue that Microchip owes some of their success to being hobbyist friendly back in the mid-1980s. I mean, there they were; a tiny little company with a rather ugly microcontroller architecture. But they had the first OTP microcontrollers. And the first small UV-erasable microcontrollers. And the first flash-based microcontrollers. And inexpensive development tools and environments. And parallax and digikey selling their parts in small quantities. And a generous sample program. And articles in hobby magazines. All things that are friendly to the hobbyist market. And they hit #2 in microcontroller sales a couple decades later (and parallax is bigger, and digikey is HUGE, and Atmel tried to steal their customers away...)
Now, I don't know that they specifically intended to support hobbyists. Probably not. But there doesn't seem to be THAT much difference between a hobbyist and a small business, or for that matter compared to an engineer/scientist "playing" in a lab at a big company with the mere possibility of a new product. I think I credit microchip with having the VISION to see microcontrollers succeeding in small markets (which happens to include hobbyists), while everyone else was still thinking about mask-rom parts sold in 100k min quantity. Atmel got the vision too, and used some of the same techniques, and also got well-adopted by the hobbyist community.
(And you know what? OTHER companies are getting on-board too. Motorola/Freescale chips used to be next to impossible to get, but not any more. TI put one of their 2nd-generation MSP430 chips in a DIP package, after years of fine pitch SMT only. Even Renesas (who do the former Hitachi and Mitsubishi micros, and are NUMBER 1 in the market, and which NEVER used to be hobbyist-friendly at all) is out there with free C compilers, IDEs, and generous terms on cheap/free development hardware... Cool. It's a GOOD time to be interested in microcontrollers!)
Yes I agree there is the "seed corn" idea, most manufacturers know this, that's why development kits are often very cheap and often subsidised or given away free. Especially at the University level, having graduates know about your chip is useful.
That being said I think this is more of a tactical move than a strategical one and while it might feature as part of a marketing initiative, I can't see it being of any possible consequence or consideration to those who buy and sell companies.