VLSI gives in to takeover pressure from Philips

VLSI gives in to takeover pressure from Philips
David Manners One of the most bitter takeover battles in semiconductor industry history has ended with Royal Philips taking over VLSI Technology. Philips had to jack its original $17 a share offer up by $4 to $21 to secure the deal, paying just under $1bn for the company. During the battle for VLSI, Philips threatened to have the board removed while VLSI threatened to implement a poison pill. However stormy the flirtation, a marriage has been agreed. It looks like VLSI was after Philips’ money, while Philips wanted VLSI’s classy act in integrating system-level ICs to increase its status in the digital consumer market. Adding VLSI’s $550m 1998 revenues to Philips’ $4.5bn sales last year, semiconductor sales would have taken it into sixth place in the world semiconductor league table. However, in VLSI’s core competency area – standard cell – revenues declined 25 per cent last year to $440m. This has been attributed to VLSI’s phased withdrawal from supplying the PC market.


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