Based on the most recently completed quarter, Sanyo Semiconductors annualized revenue was approximately USD$1.2 billion and the annualized revenue of the combined entity would be approximately USD$3.5 billion. The acquisition is expected to be completed before the end of the year.
Under the agreement, Sanyo says On Semiconductor will gain access to market-leading Japanese and Asian customers, whilst it will be able to take advantage of significant efficiency gains, expected through optimization of manufacturing, process technology platforms and efficient capital investments.
Pursuant to the terms of the agreement, Sanyo Electric is expected to receive approximately USD$129 million (¥11.6 billion) in cash and approximately USD$238 million (¥21.4 billion) worth of On Semiconductor common stock. This is expected to equal approximately seven to eight percent of the companys fully diluted shares outstanding, subject to adjustment at closing.
Keith Jackson, president and CEO of On Semiconductor stated: By combining these two highly complementary businesses, we will be better positioned to capture growth on a global scale… Strategically, this acquisition is expected to provide us with increased access to an important part of the global semiconductor market – the Japanese market, where Sanyo Semiconductor has a more than 50 year operating history, and a longstanding presence at leading electronics manufacturers.
Teruo Tabata, president of Sanyo Semiconductor, added: There will be no change in the strategy as far as technology is concerned, as both companies specialize in analog technology. Instead, following the acquisition by On Semiconductor, new opportunities to introduce both companies existing products in our newly combined markets will be available.
"We can also expect to expand the consumer base and further grow the business by offering complementary products and services to each other. In addition, we can expect further business development by strengthening product competitiveness through On Semiconductors superior cost control measures in a value-added supply chain.