Microchip proposed to buy Atmel

Forum 2005-2010 (read only) General News
1

http://www.microchip.com/stellent/idcplg?IdcService=SS_GET_PAGE&nodeId=2018&mcparam=en537485

To me, this is kind of scary. I professionally developed on a Pic18F452 for 2.5 years and the experience that I have had with atmega products has been so much easier(and cheaper) it is not even comparable.

Even outside of the Arduino project, where can you get a insystem debugger(AVR Dragon) for 50$.

I think for now Atmel has said shove it but I don't know if Microchip will just go buy the stock up on the open market.

Hopefully all will work out.
Arduino ia a great platform I will continue to enjoy it.

2

I can't confirm, but last night's Nightly Business Report seemed to be saying Atmel got bought. I too hope this isn't bad news.

3

Well, I personally hope Forbes is correct in the quote of:

" But Atmel “appears unwilling to consider a transaction at this time under any circumstances.”"

http://www.forbes.com/markets/2008/10/02/atmel-microchip-semiconductor-markets-equity-cx_ra_1002markets27.html

4

Atmel may not have a choice.

5

Even outside of the Arduino project, where can you get a insystem debugger(AVR Dragon) for 50$.

Microchip's PICkit 2 does debugging with no size limit for $35USD. It also doesn't fry if you plug it into the wrong kind of USB port (ie. the kind that limits current, like I have), which I can't say for my Dragon, may it rest in peace.

I honestly don't think this is going to be as bad as many people are making it out to be - Microchip would be crazy to alienate AVR developers by discontinuing the line. That would guarantee that a whole bunch of developers never use a Microchip product again, and I doubt they're that stupid.

Personally, I'm hoping they extend their samples program to encompass the AVRs :slight_smile:

6

I just hope that AVR will not be discontinued. AVR microcontrollers have a huge community and complement PIC microcontrollers.

7

Good news, Atmel rejects the buyout offer.

http://money.cnn.com/news/newsfeeds/articles/apwire/8f21abf3b838fc4769be85850c42ac29.htm

8

If they do acquire Atmel they would be foolish to kill AVR and AVR32

:slight_smile:

9

Atmel rejects $2.3 billion buyout bid
Chipmaker says unsolicited bid was ?opportunistic?
By Dave Hannon -- Purchasing, 11/5/2008 11:19:00 AM
Executives at chipmaker Atmel are committed to their restructuring plan and last week rejected a $2.3 billion buyout proposal from Microchip and ON Semiconductor, blasting its competitors for making the proposal.

Microchip was interested in acquiring only Atmel's microcontroller business, so the proposal was built around the sale of Atmel's nonvolatile memory and radio frequency and automotive units to Phoenix-based ON.

In a letter to ON and Microchip, Amtel CEO Steven Laub says: “Atmel is currently implementing an aggressive transformation plan, improving both Atmel's cost structure and product focus. Contrary to your assertions, we are achieving significant success in this regard. Your unsolicited proposal is highly opportunistic and delivers neither fair nor full value to Atmel's stockholders.”

Laub says Atmel is seeing soft demand, and expects a challenging fourth quarter. That's why he told a conference call last week that Amtel's restructuring to a company focused on microcontrollers is on track--as the firm already has divested or closed 14 non-core product lines and will reduce its number of fabs from five to two by the end of the year.

10

[atmel] will reduce its number of fabs from five to two by the end of the year.

Well, that doesn't sound good to me. I remember how hard it was to buy Atmel MCUs back before they had the new fabs. Or are the fabs that are being sold (and to who, in this economic climate!?) dedicated to the non-microcontroller product lines?
(vision of Microchip buying the fabs cheap, and churning out their new "enhanced midrange architecture" chips...)

11

BTW, this doesn't appear to be over.
http://finance.yahoo.com/q?s=ATML
Microchip is apparently trying to replace the Atmel board of directors.

The Microchip and ON Semi CEOs said on Wednesday they remain "fully committed to our offer despite unprecedented weakness and volatility in the equity markets."

The business community does not seem to like the idea, although it's difficult to tell in the currently "volatile" market.
Meanwhile:

[ATMEL] said its "strong third quarter results despite a very challenging macroeconomic environment further demonstrate Atmel's superior product and technology portfolio and the inadequacy of the value proposed by Microchip and ON."

Where "strong third quarter" is reflected by losing money and failing to meet the street expectations for earnings. Not a very friendly climate out there for anyone, I'm afraid!

12

The saga continues see Atmel statement at http://ir.atmel.com/releasedetail.cfm?ReleaseID=347418

Atmel Issues Statement in Response to Microchip and ON

SAN JOSE, Calif., Nov 12, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Atmel(R) Corporation (Nasdaq: ATML) today issued the following statement in response to the announcement from Microchip Technology Inc. (Nasdaq: MCHP) and ON Semiconductor Corporation (Nasdaq: ONNN) that Microchip intends to nominate a slate of Microchip director representatives at Atmel's next annual meeting and that Microchip has received clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, to purchase 50 percent or more of Atmel's outstanding common stock:

Microchip and ON's announcement does not change the fact that their October 1 proposal is inadequate in multiple respects - it significantly undervalues Atmel, is unacceptably conditional, is subject to significant execution risk, and is not in the best interests of Atmel's stockholders.

We are confident that Atmel stockholders will realize greater value through the continued execution of the Company's transformation plan, which is just beginning to unlock the value inherent in Atmel. Indeed, Atmel's strong third quarter results despite a very challenging macroeconomic environment further demonstrate Atmel's superior product and technology portfolio and the inadequacy of the value proposed by Microchip and ON.

Microchip is a competitor to Atmel's Microcontroller business, ON is a competitor to Atmel's RF/Auto business, and both Microchip and ON are competitors to Atmel's EE-PROM business. Notably, ON has not filed for antitrust clearance for its proposed acquisition of Atmel's Nonvolatile Memory, RF and Automotive businesses, and does not intend to do so until the execution of an acquisition agreement with Atmel. Further, while Microchip and ON claim to be "fully committed," in its analyst call just two weeks ago, ON made clear that it is under no obligation to proceed under the Microchip and ON proposal, and that ON is essentially viewing this as an option to perform due diligence. Providing major competitors with a "free option" to access Atmel's sensitive, confidential information, based on an inadequate, opportunistic and highly conditional proposal and when there is no assurance that a transaction will be entered into on acceptable terms, is not in our stockholders' best interests.

Atmel's Board and management are committed to enhancing stockholder value. We will continue to take all appropriate steps to protect our stockholders' interests and ensure that they are the beneficiaries of the value inherent in our company, rather than allowing it to be transferred to Microchip and ON.

As previously announced on October 29, 2008, after a comprehensive review, and with advice from outside financial and legal advisors, Atmel's Board unanimously determined that the October 1, 2008, unsolicited proposal from Microchip and ON is inadequate in multiple respects, including value, conditionality and complexity, and is not in the best interests of Atmel's stockholders.

Morgan Stanley and Credit Suisse are serving as financial advisors, and Wachtell, Lipton Rosen & Katz is serving as legal counsel to Atmel.

13

I wish atmel would make more sense. It's all very well to say that $5/share "undervalues" the company, but it's been over a year since "The Market" valued Atmel at $5/share, and most of that year was before the economy in general tanked. "Transformation plans" are all very well and good, but these are tough times just to keep your sales/value/stock price constant, much less grow at significant rates. I don't know that being acquired by microchip would be a good thing, but it doesn't look like good things are likely otherwise either.

Of course, if the market keeps going the way it has been going, Microchip/On may not be able to afford the $5/share original offer. It would be sad if that were Atmels actual "plan."

14

Oops. Late news. ON has dropped out of the bid...
18-Nov:

NEW YORK (MarketWatch) -- ON Semiconductor Corp. said Tuesday that it was withdrawing from its joint proposal with Microchip Technology Inc. to acquire Atmel Corp. ON Chief executive Keith Jackson said, "While we believe that Atmel's Nonvolatile Memory and RF and Automotive businesses would be an attractive strategic acquisition, we have decided to withdraw from the proposal due to the unforeseen deterioration in the semiconductor market since we announced our proposal as well as the unprecedented weakness in the financial markets."

15

Interesting short history of Atmel and comment on stock value

16

MicroChip is still trying to get control of Atmel

http://www.microchip.com/stellent/idcplg?IdcService=SS_GET_PAGE&nodeId=2018&mcparam=en538947&from=rss

17

Who is going to finance a potential deal?

I do not see this happening right now

18

@gnu_linux
What deal? It appears that Microchip is trying to install its own
board members for a take-over, not a buy-out. Did I miss something?

19

It seems the deal is off: http://blog.makezine.com/archive/2009/02/microchip_takeover_of_atmel_off.html