Royal Philips Electronics has caved in and agreed to acquire Silicon Valley-based semiconductor manufacturer, VLSI Technology, for a higher price, valuing the deal at almost $1 billion.
The new price of $21 per share is an improvement on the $17 per share offer the Dutch company originally made in March. Since then it has been in deep negotiations with VLSI after it complained bitterly that the price was too low.
VLSI has approximately 46.6 million shares outstanding, of which Philips already owns 1.2 million. Philips will also cash out options on an additional 11.3 million VLSI shares.
Said Arthur van der Poel, chairman of Philips Semiconductors in a statement, "After reviewing non-public VLSI information and meeting with VLSI management, we have concluded there is additional value in the company. VLSI has exactly the technology, know-how, and people in place to help further our strategy."
In the same statement, Alfred Stein, VLSI chairman and chief executive, added: "We are very please that the strategic review process has resulted in an agreement that is good for our customers, our business partners, our employees and, above all, good for our stockholders." To comment on this story, email [email protected]
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